IRS -- Businesses with Employees
As a business owner, when another person performs work for you, you must first correctly classify that person as an independent contractor or employee.
If the person is an independent contractor, refer to Forms and Associated Taxes for Independent Contractors for your tax responsibilities.
If the person is classified as an employee you must have an Employer Identification Number (EIN). Your tax responsibilities include withholding, depositing, reporting, and paying employment taxes. You must also give certain forms to your employees, they must give certain forms to you, and you must send certain forms to the IRS and SSA.