Does your company have a side hustle policy? It probably should

The concept of a side hustle – aka moonlighting, freelancing or whatever you want to call it – is far from new. But with a looming recession, inflation and the “quiet quitting” trend, side hustles are getting more buzz than usual. 

For businesses, the idea of employees having a second job or a profitable hobby may not seem ideal. You may have questions about whether their work will be affected or if they’re putting in all their effort at work. It’s important to know how to handle employees who want to begin or already have taken on a side hustle.

You may want to keep your business safe with an outside employment policy or non-compete agreement as more and more employees begin to work beyond their 9-5.

Side hustle trends

Forty percent of Americans in 2022 have a side hustle, according to research from Zapier – a 6% uptick from December 2020. In 2022 alone, about a third of Americans (36%) have started or plan to start a side hustle.

The research also found that certain groups are more likely to begin a side hustle than others – namely, Gen Z and millennials are more likely to report having a side hustle than older generations, and men are more likely to have one than women. 

Some popular side jobs include:

• Tutoring
• Secondhand selling
• Online coaching or consulting
• Dog walking, and
• Freelance writing or graphic design.

Creating a side hustle policy

There are many reasons why someone would want to start a side hustle – maybe they’re struggling to make ends meet, have a particular hobby or skill they can monetize or simply want to save up a little more money. Regardless of what the reasoning is, having a policy in place for any employee who wants to take up a second job or monetize a hobby can help keep everyone on the same page and clearly communicate expectations. Here are a few best practices for creating a side hustle policy:

Understand the legal bounds of side hustles 

Many states have protections in place that prevent employers from taking adverse action against employees who have a second job if there is no illegal activity or direct conflict of interest going on. Before you go about drafting a policy, understand the legal limits of what your company can request of employees when they’re not at work.

Establish clear limits on what is and isn’t allowed

Although you don’t want to completely bar employees from taking up a side hustle, you can (and should) set limits for employees who do have a side gig. Here are a few specifications to consider adding to your policy:

• Can employees use company equipment such as workspaces or laptops for their side job?
• What is and isn’t allowed during working hours (i.e., can employees engage in their side hustle at work)?
• Can employees promote their side business or solicit from other employees, vendors or customers?
• Are there limits on using proprietary or confidential information from the company to benefit an outside employer? 

Set boundaries for what type of work can be done

A conflict of interest is a valid exemption to allowing side hustles. If an employee has a second job with a direct competitor or is engaging in work that may be considered a conflict of interest, that may be a reason to prohibit a side hustle. 

Make it clear what type of work is and isn’t allowed, as well as outline what constitutes a conflict of interest. A conflict of interest doesn’t just mean the company as a whole. It may refer to a conflict with the duties an employee is expected to perform at work or conflict with scheduled work hours.

Evaluate cases on an individual level

Of course, one size does not fit all. Just like any policy, there will be some exceptions to the rules you set forth. You may want to establish a process for employees to disclose any secondary jobs to supervisors in order to clearly evaluate whether it violates any of the rules of your policy.

If there is a conflict of interest or another issue, think before you act. Before calling a violation of your side hustle policy, evaluate the situation objectively, including the employee’s role at the company and the extent of the violation.