Peacock Tales • Summer 2019


Managing the Side Hustle - Employee's Take

According to a study released in early 2018, 4 out of 10 Americans, have a "side hustle."  Millennials rank even higher, with over 51% participating in a side hustle. We aren't talking about the clandestine activities that one may envision when the word "hustle" is used; these are legitimate jobs that increase a person's weekly/monthly income.

But why do people juggle more than one or two jobs? Why do they sacrifice the time off the clock from their primary job to work a second job that takes them away from their family and friends?

Money is the driving force behind the side hustle. Employers may argue that employees are provided an adequate wage, but what happens when adequate wages and real-life expenses do not align? As most of us are aware, the cost of living increases annually. We pay more for food, clothes, gas and utilities, but how many people actually receive an annual wage increase that matches the increased cost of living? The struggle of living from paycheck to paycheck is real and oftentimes the side hustle is necessary to keep a family afloat until the next paycheck can be cashed.

If you're thinking of starting a side hustle, you should consider several important things before you jump in. First, be sure to review any policies that your employer has and any contracts or agreements that you have signed since you started working for your employer to determine whether your employer places any restrictions on work outside of your regular employment or your ability to start a new business. More than likely you'll find restrictions on competing directly or even indirectly with your employer and restrictions on the use of your employer's proprietary information for your own purposes.

Next, you should determine whether those documents contain language about giving your full time and effort to your employer. This means that when you are not engaged in a hobby or family time or sleeping you are expected to be working for your employer. Such language does not allow for much flexibility for side jobs; your employer always gets your time first. It also might make sense to notify your manager or HR person that you intend to engage in a side hustle in order to avoid putting your day job at risk.

Finally, be aware that depending on what your side hustle is, your employer may be able to claim ownership of it and its proceeds. Especially in the case of intellectual property, but also if you manufacture a tangible product for your side hustle, your employer may claim that the proceeds from the side hustle are theirs unless you make it legally clear otherwise. If you do work in your side hustle that is considered within the scope of your regular job, your employer may claim that it is 100% owned by your employer. Even if your side hustle is completely different than your job, your side hustle could still be at risk. In order to avoid this uncertainty, you may want to consider forming a separate limited liability company (LLC) to ensure that you own your side hustle assets. An LLC would also protect your personal assets from any claims against your new business or product.

In order to maintain ownership of your side hustle and any proceeds generated by it, it is recommended that you consult with a Peacock Keller lawyer in order to avoid a costly surprise later.

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