“I am married and have a situation at work. A colleague, who works directly for me, is friendly with me and she keeps saying that does not want to be intimate but shows me many signs like allowing me to see the color of her underwear. She says she needs a hug and frequently and lets me put my hands in her pants in the back only. She is also married. Please help.”
As you are in a supervisory position, you carry the greater responsibility. If this ridiculously immature and hurtful behavior is exposed, she will likely cry victim. You, as the one higher up the company hierarchy, will be held responsible, even if it is behavior initiated by the woman.
Work aside, you stand to lose all you have with your wife and your children in exchange for something so shallow and meaningless.