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If a single person builds the 1st version of the application and gets the first 20 or so paying customers, is the 2nd person to work with the 1st person considered a founder?

I guess I'm just not sure where the line is drawn between a founder and the 1st employee

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The line is drawn by agreement. The relationship is explicitly specified. It would be foolish on the part of either of them to not be clear on this point.

Generally, founders work for free for some period of time. If the company is funded or profitable, calling a new person a "founder" seems kinda odd.

With some companies, that first employee can be a bit of a hybrid (taking a crappy salary and a non-trivial bit of equity).

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