The number of employees seeking out alternative streams of income has been increasing over the past two years. So, what are the key considerations for employers, and how can employees be supported?

Why has the number of employees with a side hustle increased?

A 'side hustle' is a way for employees to generate income in addition to their main employment. They have been on the rise since the Covid-19 pandemic - according to a study by Aviva 19% of adults in the UK have started one since March 2020.

With many businesses implementing flexible or hybrid working models, employees often now have more time to pursue activities outside their main employment, including additional income generation. Some employees are taking on secondary work out of necessity due to the cost-of-living crisis, while others are using them as creative outlets, with the most popular being selling handcrafted products (23%), followed by freelancing (12%).

What are the potential benefits?

There are potential mental health benefits, particularly if the job is creative or something the employee particularly enjoys. Employees may also learn valuable transferable skills that they can use in their main employment, for example marketing or sales.

What things should employers consider in relation to side hustles?

Employers should consider the following points to ensure that the business has adequate protection and that employees are appropriately supported.

What does the contract say?

There is nothing to prevent an employee from engaging in secondary work provided it is outside of their normal working hours and is not in breach of their contract of employment. Employees are not obliged to inform you about any side hustle unless their contract specifically requires it.

Check what the contract says. It may have a clause which, for example:

  • prohibits additional employment – either entirely or if it competes with the business
  • requires your consent before the employee can undertake additional employment
  • requires the employee to devote the whole of their time, attention and abilities to the business
  • puts an obligation on the employee not to do anything that damages the reputation of the business

If an employee works on a second job in breach of a contractual obligation, you may be able to take disciplinary action if it is reasonable to do so. Be aware though that side hustles will not necessarily amount to 'additional employment' – it will depend on the contract terms and exactly what the employee is doing.

If you are asked to agree to an employee undertaking other work, exercise your discretion reasonably otherwise there will be a constructive dismissal risk.

Working time and rest breaks

The Working Time Regulations (WTR) limit working hours to an average of 48 hours per week. If you are the primary employer, you must take reasonable steps to ensure that employees' average working time does not exceed 48 hours per week. The 48-hour threshold includes the time spent working at a second job. The WTR also require you to allow workers minimum daily and weekly rest periods.

In addition, employers have a general responsibility to protect the health and safety of all staff and to make sure that their working hours do not pose a risk to themselves or to others.

To ensure that your obligations are met, you may want to ask employees to:

  • disclose whether they are taking on extra work
  • opt out of the WTR
  • depending on the circumstances, reduce the amount of time spent working on their side hustle

Do not assume that an employee's performance will be negatively affected by them undertaking a side hustle. However, there are potential issues, for example:

  • the employee might work long hours overall, negatively impacting their concentration and performance in their main role
  • you might become aware that they are working on their outside interests when they should be working for you

Depending on the circumstances, these issues can be addressed through your capability or disciplinary procedures.

Confidentiality and competition

If an employee's side hustle is in the same sector as their main employment, there may be concerns around confidentiality and competition.

The implied duties of confidentiality and not to compete are often reinforced by express contractual confidentiality provisions and a tailored definition of confidential information. Consider reminding employees that they must comply with these obligations (and not bring your business into disrepute) while doing additional work, making it clear that a breach might lead to disciplinary action.

Company property Are employees permitted to use company equipment (including any specialist software) for any purpose other than company business? Review your employment contracts and IT policies to ensure that the position is clear.
Support for employees Given that many employees are engaged in side hustles just now due to the cost-of-living crisis, it is important to think about whether you can offer employees any support. Some employers are offering one-off cost-of-living payments, others are providing access to financial advice and wellbeing counselling. It is also something to factor in when exercising any discretion over whether to allow employees to undertake other work.

More information

If you undertake a review and decide to make some contract or policy changes, see our earlier blog covering the key considerations and risks when changing employees' terms and conditions.

Workbox by Brodies, our online HR and employment law site, has practical guidance and over 200 templates, including contracts of employment and a new letter making a one-off cost-of-living payment.

Please get in touch with a member of Brodies employment and immigration team if you would like to discuss any matters raised in this blog.


Julie Keir

Practice Development Lawyer

Emily Russell