The rise of side hustles could lead to various problems for Employers.

The rise of side hustles could lead to various problems for Employers.

Employer’s problems with side hustles

Side hustles are work other than your main job. Unlike a second job, they are typically run as a side business, or working on a freelance basis. It could range from selling homemade goods like cakes or chocolates, buying and reselling items such as clothes or furniture, driving for Uber or working as an influencer. The combination of people having time during the pandemic to expand hobbies into businesses and the cost of living crisis has led to a rise in side hustles. However, they can lead to problems for employers.

Bringing the business into disrepute

Depending on the activity, the individual could cause damage to the reputation of their main employer. For example, if they are posting controversial views as an influencer, or producing adult content as was the case of the Hollyoaks’ actress who was dropped from the show after launching an OnlyFans account.

If you are a business that trades on a reputation, this is easily lost by the actions of an individual associated with your business.

Working Time Regulations

Unless they have opted out, employees must not work more than 48 hours a week and employers have a duty to monitor working time. Yet many employers are not aware of their employee’s side hustles, the time working on these counts toward the weekly hours limit, and the employer of the main job can be responsible.

There is also the requirement for adequate rest breaks, which may not be possible if the employee is working in evenings and at weekends.

Performance issues

Even if an employee is not working more than 48 hours a week or has opted out of the limit, if their energy and attention is focused on their side hustle, their day-to-day work may suffer.

We see issues where employees now “work from home” but seem to have more activity during working hours on their marketplace account than their day job.  It may be difficult to prove the cause of any underperformance, although this doesn’t prevent an employer from addressing concerns through a performance improvement process in the usual way.

Use of company time and property

 Some employees may be tempted to run their business during the time they should be working for their employer. This could range from “quickly” checking their e-mails to spending significant amounts of time running their business during working hours. They may also use their employer’s resources such as laptops, mobiles or even postage. As well as physical property, there’s the possibility of an employee using their employer’s intellectual property.

One of our team has dealt with a case where a sales person, had two sales jobs for two different employers, which had the same round. The sales person was effectively taking two salaries and two commissions selling different products to the same customers.

Competition

If the side hustle is in the same sector as the main employer, it could be in competition and it could risk an employee using or disclosing the employer’s confidential information for their own benefit or even diverting orders or business for their own benefit. The damage could be compounded if the employee then leaves to pursue their side hustle full time.

How to deal with side hustles

Employers should not automatically assume that all side hustles are negative. They can be beneficial by improving wellbeing, making employees feel more financially secure and allowing them to learn and develop new skills. But employers should make sure that they are adequately protected.

The first step is to ensure that the contract of employment covers areas such as confidentiality, requirements during working time, use of employer’s property and post termination restrictions. The second step is for employers to review, or put in place, applicable policies. For example, they may allow employees to use a work mobile for personal calls but wish to prohibit use within an employee’s business.

If your contracts or policies need updating, contact Trula Brunsdon or Darren Sherborne.