Moonlighting in the modern workplace is a delicate dance for employers and employees

The rise of side hustles amid economic challenges

The burgeoning gig economy and the relentless cost-of-living crisis have driven many employees to seek secondary jobs. Side hustles have become a financial imperative for many, as salaries struggle to keep pace with inflation. As an employer, you face the dual challenge of maintaining competitive compensation packages while managing your own financial constraints. This has inadvertently led to a workforce that is increasingly reliant on multiple income streams to sustain their livelihoods.

The entrepreneurial spirit of Gen Z has further fueled this trend, with many young workers viewing side hustles not only as a means to an end but as an integral part of their career development and personal fulfillment. As a result, you are now tasked with the delicate balance of accommodating employees’ needs for additional work while safeguarding your business interests and ensuring operational efficiency.

Legal and contractual considerations for you as an employer

As an employer, you must navigate a complex legal landscape when managing staff with side hustles. The duty of good faith and fidelity is inherent in the employee-employer relationship, mandating that employees must not compete with their employer, even outside of work hours, if such activities could harm the business. Breaching this duty can lead to serious misconduct allegations and potential dismissal.

For directors and senior employees, fiduciary duties are heightened, requiring them to act in the company’s best interests. Contracts often explicitly prohibit working for competitors, and full-time roles may include clauses against any external work without express permission.

The Working Time Regulations also impose a 48-hour working week limit, necessitating you to monitor employees’ external work to ensure compliance. Failure to disclose secondary employment can be treated as misconduct, underscoring the importance of clear contractual terms and robust HR policies.

Managing work-life balance and employee wellbeing

The pursuit of side hustles, while financially beneficial, can strain an employee’s work-life balance and wellbeing. The additional workload may lead to longer hours, reduced rest, and potential burnout, which can adversely affect performance in their primary role with you.

A Stanford University study found that productivity per hour declines sharply when a person works more than 50 hours a week. Moreover, the Working Time Regulations advocate for an 11-hour uninterrupted rest period daily, emphasizing the importance of rest for an employee’s wellbeing.

As an employer, you must be vigilant in monitoring the impact of secondary employment on your staff’s health and productivity. Implementing supportive HR policies that acknowledge the need for balance and rest can help maintain a healthy work environment. Such policies should aim to protect your business’s interests while also considering the employee’s private life and entrepreneurial aspirations.

Strategies for you as HR to support and manage moonlighting employees

To support and regulate secondary employment, you can implement non-contractual policies that provide a framework for approval and disclosure of additional jobs. These policies should be designed to protect the company’s interests without unreasonably infringing on employees’ private lives or entrepreneurial activities.

For instance, requiring employees to inform you of any second jobs can help prevent conflicts of interest and ensure compliance with working time regulations. You can also foster an open dialogue with employees to understand their motivations for moonlighting and to assess any potential impact on their primary role.

HRD Connect Curators of the New Business Landscape. HRD Connect produces industry-recognized content for senior HR leaders. Through articles, case studies, Q&As, podcasts, events, and more, we offer truly progressive and cutting-edge insights designed to help people leaders address core HR challenges and add greater value to their business.

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