get a new router... seriously, not trying to be a jerk. I relatively cheap router (I know DLINK does it) can use keywords. You could block porn keywords and anything with say "teen" in the url would not be allowed to access.
Get the employee to sign a new works contract stopping him/her from viewing porn, using chat, downloading files and images you don't want him//her to see/use/save to hd.
Then set firewall to bar all known abuses. Then get yourself a keylogger application that will record their keystrokes, read the logs at your leisure, then if they don't fit your model for a safe employee sack em.