Yes, you do! If your family member is working for you, he or she is an employee, just like everybody else. There is often a temptation for small family-owned businesses to assume the employment laws do not apply to a family member’s employment, but those laws generally do not have an exemption for family members. A business’ relaxed approach with respect to family members can also easily spill over to non-family member employees.
Pay close attention to federal, state and local employment laws regulating the employment of your family member. They are entitled to an overtime pay if they are a non-exempt employee, sick leave, and many other benefits.