Briefing: Are side hustles acceptable to employers?
The concept of a side hustle has become better known over the last few years. Traditionally, the term ‘side hustle’ might describe someone working two jobs, perhaps leaving one job at the end of the day and commuting straight to a second job in the evening. A side hustle has now become popularised to refer to a business that an individual is running on the side while holding down a full-time job. The side hustle may not be large in scale and examples include freelance writing, online tutoring or coaching or making and selling cakes. With side hustles becoming more common, this briefing considers how employers should respond to this challenge to the traditional concept of a (full-time) employee having no other business interests.
Is a side hustle legal?
In short, yes. There is nothing in UK law to prohibit someone from having two or more jobs. However, some employers may have standard restrictions in their employment contracts that impact on this. There might be an outright ban on taking up other employment (although this is rare). More common is a requirement to disclose to the employer any second job or alternative form of income.
There may also be contractual restrictions on employees having “outside interests”, which can include an interest in any other business. Or it may be more limited to just a restriction on an employee being involved in a business that competes with the employer’s business.
Employers should check their standard contracts and staff handbook for any such provisions.
The law implies into all employment contracts an obligation on the employee to serve their employer with good faith and fidelity. This includes not placing themselves in a position where their duty to the employer and other interests may conflict. This would cover a scenario where an employee’s side hustle competes with the employer’s business, but it would not apply to a side hustle in a different field.
Working time
Employers often ask employees to disclose second jobs because employers are required to keep track of the employee’s working hours across all jobs in order to ensure that they are taking the rest breaks and periods prescribed in the Working Time Regulations - for example, not exceeding the 48-hour limit on an average working week.
Employers may be concerned that an employee who is operating a side hustle is at risk of burn out and may not be getting sufficient rest and recuperation in their time away from work. This could have a detrimental impact on performance and could be a health and safety issue if the employee operates machinery or works in a safety critical role.
Ban?
For these reasons an employer may decide to prohibit employees working on a side hustle. This will need to be a considered decision as some businesses will be an extension of hobbies and something that the employee enjoys. Others may need the additional income. So, an outright ban could lead to resignations or resentment at a time when recruitment still remains difficult in many sectors.
A more measured approach would consider permitting a side hustle but with conditions, such as those suggested below.
Employers may wish to make it clear that their hardware and software is not to be used for the purposes of the side hustle. As the name suggests, a side hustle is something that should be carried out by the employee on the side and they should not be using the employer’s equipment. By imposing these conditions, this also helps to prevent accidental misuse by the employee of the organisation’s name, logo or branding, which could implicate the business in the side hustle and so affect its reputation.
Employees should be clear that any second role should not conflict with its own and should not involve providing any goods or services that might compete with the employer’s business.
Employees should be reminded that their core working hours should be spent on the employer’s business and the side hustle should not impact on this. Some employers may choose to take this further and review their options for policing this through ‘employee monitoring’. There is a wide range of monitoring technology available, the legal implications and pros and cons of which are not discussed here.
If clear boundaries are set then the chances of the side hustle impacting detrimentally on the employer’s business are much reduced.
Ben Stepney is a partner in the Employment Team at Thomson Snell & Passmore LLP.
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