11 Things You Should Know About Side-Hustles as an Employee in California

In today’s gig economy, many individuals in California are looking to supplement their income by engaging in side-hustles. While side-hustles may offer financial benefits and personal fulfillment, it is crucial to understand the legal implications and potential pitfalls associated with these ventures.

In California, there are several regulations and considerations surrounding employees having a side-hustle, including:

1. Conflict of Interest

Employees should avoid any conflicts of interest between their primary job and their side hustle. It is essential to ensure that they are not using paid company time to engage in outside work.

2. Confidentiality and Intellectual Property

Employees must ensure that their side hustle does not involve the use or disclosure of their employer’s confidential information or intellectual property. This includes avoiding the use of company resources, trade secrets, or proprietary information.

3. Moonlighting Policies

Some employers may have moonlighting policies that require employees to disclose their side hustles or seek approval before engaging in additional work. It is advisable to review the company’s policies and follow any necessary procedures.

4. Working Hours and Rest Breaks

California has specific labor laws regarding working hours, overtime, and rest breaks. Employees with side hustles must ensure compliance with these laws to avoid potential penalties.

5. Tax Obligations for Side-Hustles

Engaging in a side hustle means additional income, and with it, additional tax obligations. It is crucial to understand your tax responsibilities, such as reporting and paying taxes on your side hustle earnings. Failure to comply with tax laws can lead to penalties, fines, or legal action from tax authorities.

6. Business Licensing and Permits

Certain side hustles may require specific licenses or permits to operate legally in California. For example, selling handmade goods, operating a food-related business, or offering professional services may require you to obtain appropriate licenses. Failing to comply with these requirements can result in fines, penalties, or business closure.

7. Employers’ Rights to Ask About Side-Hustles

In California, employers generally have the right to ask about side-hustles, but there are limitations and legal considerations that employers must follow:

8. Privacy Rights of Employees

Employees have a right to privacy, and employers must be cautious about invading their privacy or asking intrusive questions unrelated to job performance. Employers should only inquire about side jobs when necessary for business-related reasons, such as potential conflicts of interest.

9. Protected Activities

California law prohibits employers from taking adverse actions against employees for engaging in lawful off-duty activities or employment. This means that employers cannot discriminate against employees based on their side jobs, as long as those jobs are legal and do not interfere with primary job duties.

10. Anti-Retaliation Protections

California law provides protection against retaliation for employees who engage in protected activities. If a side job is related to a protected activity, such as union organizing or political activism, employers cannot take adverse actions against the employee.

11. Non-Disclosure Agreements (NDAs)

If an employee has signed a non-disclosure agreement (NDA) with their employer, they may have an obligation to disclose any secondary employment that could potentially conflict with their primary job duties or expose confidential information.

Contact TONG LAW for Legal Guidance

If you have concerns about engaging in a side-hustle while employed, or if your employer is violating your rights regarding your side job, contact TONG LAW for legal guidance.