First published on Monday, Aug 23, 2021
Last updated on Tuesday, Nov 08, 2022
Side hustles are the new norm.
Etsy’s recent success showed this. During the height of the pandemic, Etsy saw a 72% increase in active sellers.
But this is old news. A shift in perspectives has been on the horizon for a while. Millennials have invested in (and profited from) their hobbies more than any other generation before them.
However, as their boss, what should you do when you hear one of your employees has turned their passion into a business?
While side hustles are largely a good thing, there are a few pitfalls to make sure you avoid.
Should I let my employee have a side hustle?
There’s plenty of research that suggests employees with hobby-based second jobs are happier and more productive in their day jobs. They’re more innovative, proactive, and organized.
Side hustles are also great educators. People with a side hustle pick up transferable skills like customer service, project management, and budgeting. They take these new skills with them for the rest of their life.
As an employer, you could even look at side hustles as business training you don’t have to pay for.
So, what’s the problem?
While a worker making a bit of extra dough on the side shouldn’t be an issue in theory, there are a few risks you should consider.
Ensuring Employee Wellbeing
Across Canada, there are policies in place that govern the maximum time an employee can work in a week. In most cases, the maximum is 48 hours. There are provinces that allow for more hours to be worked if agreed upon (either in writing or electronically). However, these policies do exist for a reason, to ensure that your employees are getting enough rest.
Failing to take reasonable steps to protect your workers’ safety and wellbeing is a big no-no. If you don’t ensure that limit on working hours, you could be in danger of receiving fines or penalties for noncompliance with Employment Standards legislation in your province.
To address this, it’s important that you create a two-way communication with your employees that is open and honest. Be sure to encourage your employees to disclose any extra work with you so that you can assure their wellbeing.
Employee Performance
If an employee’s activities outside of work start to infringe on their productivity in their main role, you’re looking at a problem.
However, before you start thinking about disciplining your employees, lets pump the breaks for a second. Let’s assess your options.
Our advice? Be proactive. Have an open discussion with your employee.
It’s important that you have this conversation. According to StatsCan, the percentage of people who have a second job has risen to 5.7% from 5% since 1998. And as recent as 2019, Better Dwelling reported that 1.1 million Canadians had a second job. This shows a very real need for many Canadians that is not being met through one job, whether that is passion-based, financial or otherwise. This is a conversation that you should be having with your employees. Ultimately, you won’t know why your employees are seeking extra work unless you ask.
In any case, make sure your business is protected.
Competition
You don’t want an employee using the same skillset for their side hustle as they do when they work for you. That’s a clear conflict of interest.
Many employers will include a non-compete clause in an employee’s contract. This discourages activities that conflict with their primary employer’s business interests. In other words, they can’t go and do the job you pay them for elsewhere while they’re still with you.
However, there is legislation that you need to be mindful of. In Ontario, employers are not allowed to enter into employment agreements that include a non-compete agreement.
While you’re at it, check your confidentiality policy. Make sure you’ve got your confidential information under protection while your employees are outside of work.
That extends to your facilities and equipment too. After all, they’re meant for your business, not their side gig.
Are you dealing with side hustles at work?
If so, you don’t have to do it in the dark.
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