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Side hustles – what employers need to know

As the cost of living crisis rages, many employees will be looking to take on additional work, away from their main job. What are the legal implications and practical ramifications that side hustles can have for employers, asks employment lawyer Daisy Watson

A recent Aviva survey found that, since March 2020, 19% of employees have started a “side hustle” alongside their main job. It is additional work or employment from which an employee receives income in addition to their main job, usually used in the course of an entrepreneurial activity.

This phenomenon is not new, but with the advent of the digital age and the rise of remote working, employees have more opportunities than ever to indulge in side activities. Additionally, non-traditional professions such as social media influencers have become more viable sources of income.

The post-Covid-19 work landscape is a very different space, with many employers embracing flexible and hybrid work models. This gave employees more freedom to pursue not only leisure activities, but also additional forms of income generation.

The cost of living crisis has also likely bolstered employee decisions to pursue secondary occupations, with recent ONS statistics showing that regular pay has fallen at the fastest rate in over a decade and the inflation significantly outpaces wage growth.

There is no doubt that social media has had a significant impact. On all social media platforms, it seems the message is clear: you need to do more if you want to be successful. Become an influencer, sell handmade products, try affiliate marketing, post funny videos, go freelance or host nutrition classes: the opportunities are seemingly endless.

Why might the jostling concern employers?

Insufficient rest time: Even if employees do their odd jobs outside of their working hours for their main job, they may find it difficult to be able to benefit from sufficient rest time. In addition, where employees are unable to take sufficient breaks, employers may fear breaching the Working Time Regulations 1998, which require employees not to work more than 48 hours per week on average. .

Employers also have a responsibility to ensure, as far as possible, the health and safety of their staff and to ensure that excessive working hours do not pose a risk to employees or other staff. If it turns out that
employees put themselves or others at risk, an option could be for employers to ask the employee to reduce their working time or to agree to the employee reducing their working time.

Employee performance: If an employee works long hours on an additional income stream, it is possible that their energy reserves and ability to concentrate will decrease, leading to performance problems. The possibility of secondary agitation should also be considered when investigating performance issues, but no assumptions are made. Problems can arise if an employee does not provide information regarding a secondary agitation and denies having other interests outside of work. In this scenario, capacity and disciplinary procedures should be followed, where applicable.

Issue tracking: In response to the survey results, employers may wish to monitor remote staff more closely to ensure that they are not working at their own business during the hours when they should be working for their employer. This raises potential issues regarding privacy and data protection.

The post Covid-19 work landscape is a very different space. This has given employees more freedom to pursue not only leisure activities, but also additional forms of income generation.

Secondary agitation can discredit the employer’s business: Depending on the activities carried out by the employee, there is a risk that he brings his employer’s business into disrepute and/or tarnishes his reputation, for example if he publishes opinions on controversial subjects as an influencer.

Use of company equipment, materials and products: Employers may be concerned that their employees use company equipment or materials to supplement their additional sources of income, particularly if the employee uses the employer’s products, such as making videos as influencer on social networks, or uses the company
materials to make goods for sale.

Intellectual property rights: When employees use company equipment or work on their side businesses alongside their main job, it can raise questions about whether their employer has intellectual property rights to anything they create .

Working two jobs at the same time: We know anecdotally that, while working fully remotely, some employees have been able to occupy two traditional full-time positions simultaneously, while keeping their other job secret from their employer. Employers may be particularly concerned if their employees are not devoting their normal working hours to their jobs. Employees who do so are likely to violate their terms of employment, which could be a misconduct issue resulting in disciplinary action and possible termination.

Non-competition: If an employee’s secondary activity is in the same industry as their main job, employers might wonder whether their employee is profiting from the information they receive from their main job or is in direct competition with their employer.

Employers may be particularly concerned if their employees are not devoting their normal working hours to their jobs.

Risk of resignation of employees: If an employee’s side hustle becomes particularly lucrative, employers may fear that the employee will quit to pursue their second full-time job, meaning they must recruit a replacement in a very hot job market. tense.

What are the advantages for employees who work in parallel?

Increased well-being: Often employees are scrambling to do something they particularly enjoy. They might find that their side hustle frees them up from their normal daily work and is good for their mental health. Imposing restrictions could hurt morale.

Bring new skills to their main job: Employees can learn valuable transferable skills through their side jobs, which will ultimately enable them to perform better in their main job.

Legally, nothing prevents an employee from engaging in a secondary activity if he does so outside of his normal working hours and if it does not violate his employment contract. However, employers should regularly review their employment contracts and policies to ensure that they contain provisions which, if necessary, prohibit an employee from
engage in secondary employment, or require permission to be sought before undertaking any concurrent work.

Employers may wish to update or impose restrictive covenants to ensure that employees are not able to establish businesses in direct competition with them. Although restrictive covenants can be difficult to enforce, they can act as a deterrent.

Finally, if it is clear that employees are scrambling to make ends meet, employers should consider reviewing salaries to ensure they are paying market rates and ultimately incentivize employees to consolidate. their hours of work and their commitment to a singular role. .

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