My question is, to integrate it with a chat application to work for the 
users and employees would I need to have the users and employees stored in 
separate tables? Should I create a separate table for the employees? 

It depends on how you designed your model, in the past i've walking in the 
circle for auth like chicken and egg, but as time goes by, i think 
simplicity is the best. let the auth table untouch, and create the employee 
table. you maybe asked the auth table have the field that i need, the 
answer is on the employee table.
e.g.
auth table untouch
auth.define_tables(username = True, signature = True)

employee table
db.define_table('employee', 
    Field('is_auth', 'boolean'),
    Field('auth_user', 'reference auth_user'), 
    Field('salutation'), 
    Field('first_name'), 
    Field('last_name'), 
    Field('gender'), 
    Field('address', 'text'), 
    Field('zip_code'), 
    Field('city'), 
    Field('country'), 
    Field('phone', 'list:string'), 
    Field('email', 'list:string'), 
    Field('ym', 'list:string'), 
    Field('bank', 'reference bank'), 
    Field('account_no'), 
    Field('branch', 'reference branch'), 
    Field('notes', 'text'), 
    auth.signature,
    format = '%(first_name)s %(last_name)s')

so if you want to add custom auth table, like phone, branch, etc, it all 
covered in employee table. when your system growth, perhaps you want to 
know how many employee in the company, or have payroll system too, but not 
all the employee gain the access (auth) to the system (e.g. office boy)

best regards,
stifan

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