You are an employer basically evading taxes and everything by paying him under the table.
If you make it legit with documentation, you MUST pay him as an employee. That means filing the tax paperwork, paying 1/2 of the FICA, etc.
If you want to get around all that, you can make him an "independant contractor" but you must do it this way since he'll still be seen as an employee.
1. Make him a contractual employee.
2. In the contract, stipulate that he agrees to work for you and be paid as an independant contractor....understanding that he is 100% responsible for all local, state, and federal tax obligations.
3. Stipulate that in all other regards, he works at your pleasure and can be terminated with or without notice with or without cause.
Otherwise, you are a tax audit waiting to happen. States are cracking down on businesses evading taxes by shady deals. Hiring "independent contractors" who are nothing more than employees being paid as such is a popular evasion technique and is not defensible unless (1) the relationship more closely mirrors that of a client/indepentent contractor, or (2) you have a written agreement defining the relationship as such.
Even with a contract, you have to be a little paranoid. You give him "compensation" not a "paycheck." The former goes to a contractor, the latter to an employee....even though it is the same thing.