If they are employees (opposed to contractors), then you are paying them in dollars but just the payment just happens to be in Bitcoins instead of cash, direct-deposit or jelly-beans. This dollar value is taxed and included on their W-2 like any other wage.
From your perspective it should be no different. If you normally pay them a fixed wage, you should use that dollar value and take any withholding. social security and Medicare taxes as normal. If you are paying them in fixed Bitcoins, you would need to calculate that dollar value as if you have paid them in cash, and calculate the appropriate taxes.
See Q11 in
http://www.irs.gov/pub/irs-drop/n-14-21.pdf