Are you allowed to have a side hustle when you are employed?

Why are employees taking on side hustles?

Are you allowed to have a side hustle when you are employed?

As the working world grows more flexible, an increasing number of people are dipping their toes into the world of entrepreneurialism and starting their own side hustles.

In fact, it’s understood that almost a third of UK employees (31%) have a side hustle, while a further 42% are considering starting one, according to new research. While this phenomenon is nothing new, the rise of digital technologies and hybrid working models have made side hustles more accessible than ever before.

In this post, we explore the viability of taking on a side hustle whilst still employed. Let’s dive straight in.

Why are employees taking on side hustles?

The post-pandemic workspace is completely different to the one we knew only a few years ago. Flexible and hybrid working models have quickly become the norm, granting more freedom for employees to pursue activities and passions outside of their usual work, providing opportunities for additional streams of income.

But side hustles are not just a money-making exercise. They are an outlet for creativity, personal growth and the discovery of new skills, allowing curious entrepreneurs to test the waters before leaping into a full-time business venture.

As well as being positive for an employee’s well-being, career development and financial stability, side hustles can be beneficial to employers too, offering deeper insight into their employee’s skillsets and interests and allowing them to identify progressional opportunities which could add value to their own business.

Can employees take on a side hustle?

Generally speaking, there is nothing to prevent you from engaging in a side hustle while still in employment. However, there are some potential risks to be aware of before getting started.

You should be sure to carefully review your contract of employment and relevant company policies for any clauses or restrictions on outside employment and ensure that your plans will not be in breach of any stipulations or agreements.

Some key areas to consider include:

Conflicts of interest Carefully evaluate whether your side hustle may present any conflicts of interest that could impact your ability to effectively fulfil your duties and responsibilities to your main employer.

For example, will you be representing the same industry? Will you be providing a service or product that directly competes with your employer? Do you plan on using suppliers, competitors or vendors that could influence decision-making or compromise impartiality?

Transparency and open communication are key and it’s a good idea to make your employer aware of your plans especially if they are closely linked to your current work. In some cases, your side hustle could even prove beneficial to your employer and complement your primary role.

Working hours 

It’s important to ensure that your side hustle won’t compromise your performance or impact your availability to your employer.

As well as being available to work your contracted hours of employment, you should make efforts to comply with the Working Time Regulations. These regulations permit employers from allocating more than 48 hours of work per week to an employee without written permission. As such, employers may ask you to declare any second jobs and suggest reducing your hours to prevent you from exceeding the maximum working limit.

While it is up to you whether or not you’d like to opt out of the weekly working limit, it has been put in place to safeguard health and well-being. Managing your time effectively and taking adequate breaks away from work can be crucial to avoiding health risks such as burnout or stress.

Intellectual property 

In some cases, you may wish to make use of work you have created during your main role for your side hustle. However, some employment contracts may stipulate that the employer has rights over the intellectual property you have created. It’s vital to check this before referring to any materials in support of your side hustle.

Confidentiality and non-disclosure

It’s also essential to be mindful of any confidentiality clauses or non-disclosure agreements (NDAs) regarding the use and disclosure of confidential information both during and after your employment.

This could include trade secrets, client lists, financial data, marketing strategies, or any sensitive information that is not publicly available.

Be cautious about using your employer’s resources, such as equipment, databases, or – as mentioned above – any intellectual property for your side hustle. The unauthorised use of these resources could carry significant legal consequences.

What happens if I breach my employment contract?

Breaching your employment contract can have various consequences ranging in severity.

For example, your employer may choose to respond with disciplinary action in the form of a verbal or written warning, or even immediate termination of your employment.

Depending on the extent of the breach, your employer could choose to pursue legal remedies and seek damages for any losses incurred as a result of the breach. This could involve lawsuits, monetary compensation, or injunctive relief.

Therefore, it is vital that you have examined your contract of employment and are certain you are not in breach of any agreements that could jeopardise your main employment.

Final thoughts

In legal terms, there is nothing to prevent you from pursuing a side hustle while employed, providing you are not breaching the terms specified in your employment contract or conditions within the company policy.

While you are not obliged to inform your employer of your side hustle, unless otherwise stipulated, it may prove beneficial to do so, particularly if your venture is within the same industry. This open communication will demonstrate your loyalty and potentially open doors for new opportunities, collaborations and future developments for both you and your employer.

For more insights and tips for setting up your own business, visit Quality Company Formations; the UK’s leading company formation agents.