Talent | HR Essentials | Industry Insights
The number of individuals in the workforce holding down multiple jobs has grown exponentially in recent years. This trend pre-dates the pandemic with the explosion of the gig economy but, like many aspects of business, it accelerated at lightning speed once COVID-19 hit. Whether individuals were picking up second or third jobs due to displacement during the pandemic, the skyrocketing cost of living in this new economy or simply because the pervasive shift to working from home has given rise to the opportunity to do so, small and medium-size businesses should be aware of what this could mean for their companies so they can put policies in place to protect themselves, their employees and their customers.
Working a second job may be just fine, as long as the employee is still
effective and efficient in performing the duties of their primary job. However,
it could become a problem—or a conflict of interest—if the second job takes
time and energy from an employee’s responsibilities at their main job or is
otherwise inconsistent with their duty of loyalty to the primary employer.
Employers typically have a legitimate business interest in
knowing when an employee’s outside activities
involve a conflict or potential conflict with the employee’s duty of loyalty to
the employer. When examining an employee’s outside activity,
employers should evaluate whether the outside activity:
For example, an employee offering personal training on the
weekends from their home gym may not be an issue if they work as an auditor for
your fintech firm during the week. But if you own a gym where you have hired
them to run your fitness program, their side hustle could be in direct
competition with your business.
Likewise, an engineer at your commercial architecture firm writing
articles on backyard gardening for a local home & garden publication may
not cause concern for your business. However, if they are writing about building
publicly accessible greenhouses for a magazine not affiliated with your firm,
you may want to dig deeper into these activities to decide if they present a
conflict.
It is important for companies to understand that there are a number of jurisdictions
in the country that prohibit employers from taking adverse action against
employees who have engaged in what would otherwise be lawful conduct outside of
regular work hours or away from the employer’s premises. Basically, this means that
if what employees are doing in the hours they
aren’t working for you is not illegal or in direct conflict with their duties
to your company, you could get into trouble, depending on where your business
operates, for taking adverse action of any sort due to their outside activities.
Always take into account such laws and regulations affecting
your company. Be sure to work with qualified legal and HR representation
when creating or reviewing a policy regarding outside activities. Your policy should
respect your employees’ needs and rights while providing reasonable protection
to your business.
Once you decide it’s time to set some parameters around what your company
can tolerate in regard to outside employment or other activities, you’ll want
to adopt an official policy to ensure everyone at your company has knowledge of
what is expected.
Some examples of activities a company may deem unacceptable and include in their outside activities policy include:
It is vital that your policy outlines, to the extent
possible, what will constitute a violation of the policy, how a violation will
be determined and what the consequences may be.
Making a decision on side hustles or other outside
activities can get very complicated. You want to protect your business interests, but you also need happy employees who feel supported in growing and developing
to their full potential. Employees don’t want to be treated like children or
feel that they are being surveilled by their employer.
So, just as it’s a good idea to have a comprehensive policy
that states your guidelines for outside activities in writing, it is also
important to have a system to evaluate each instance on an individual basis to
assess whether it poses a concern. A one-size-fits-all
evaluation is generally not the right solution. Your decision on whether
something is a violation should be based on the nature of the outside activity
in question and the risk that it might pose to your business.
You might want to require every individual in the company to disclose any additional outside activities they take on. Then you can evaluate if each one is an actual or potential conflict of interest as part of a formal process based on a cadence set forth in your policy. Alternatively, you can leave it to the individual to decide if it is something they should bring to your attention under a set of guidelines you provide. Whichever way you decide to proceed, here are some items to consider when evaluating if your employee’s outside activities warrant additional action or not:
Keep in mind that permitting outside employment doesn’t have
to be an either/or thing. Sometimes adding some guidelines or conditions as
part of your evaluation may be a good solution, rather than forbidding an
employee to continue in an additional role with one or more other companies. Again,
involving your company counsel and taking care to evaluate side jobs on an
individual basis will go a long way toward ensuring a proper outcome for all
involved.
With the move away from traditional office spaces, implementation of flexible
hours, more focus on work/life balance and the uber-competitive hiring
landscape, it is more difficult than ever for an employer to know with
confidence if an employee is engaging in behaviors or activities that could be problematic
or competitively harmful to their business.
As an employer, you may find it useful to look at additional
means for protecting your business, such as leveraging technology
infrastructure to monitor and protect company information and assets, time
tracking and ensuring there is a process for employees to anonymously submit
any concerns they have that could negatively impact the company. Keep in mind,
however, that these practices likely will have to be disclosed to your
employees and they could resent monitoring and actions they may perceive as
being overly intrusive.
This communication is for informational purposes only; it
is not legal, tax or accounting advice; and is not an offer to sell, buy or
procure insurance.
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