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Friday, January 16, 2009

Is it wrong to make money on the side while you're working?

It really shouldn't be if you're doing with integrity. Here's why. Let's say you put in your 40-50 hours a week at your job, work hard, deliver good results, and get paid $60,000 to do it. Then, in your time away from work, you make another $15,000 a year. Sure you don't put in the 60-70 hour weeks that some hard working colleague does. But you're not as sensitive to pay raises (or lack thereof) than someone who doesn't do it. So the company can get away with paying you a little less, and you're happy as a clamshell because you're essentially making $75,000 a year. If your colleague gets a pay raise that's lower than he expected, he might be looking elsewhere for a higher salary.

Let's take this a little further (now we're getting into uncharted territory). Let's say you have an eBay store or something and with an hour, you can buy and sell something that will make you $40. So in an hour, you've made $40. Let's say you put in another hour at work... that only nets you $30/hr (approximately what $60,000 a year equates to). Let's say you can do this every week, and somehow your company let you work 39 hours instead of 40, and paid you an hour less. You've made $10 more than you would've, and the company has an extra $30 in overtime to give to your hard working colleague who doesn't have anything on the side. So everyone wins.

Of course that doesn't happen in the real world, although some companies are doing reduced work schedules. However the perception is it's for mothers taking care of kids (which is getting outdated). Companies right now aren't prepared for this kind of thinking, so the short answer to this question is they shouldn't be, but they might. So a good compromise right now is to do things outside of working hours and employ the don't ask don't tell policy. But overall, we shouldn't need to apologize for wanting to make more out of ourselves.



Jason Cohen said...

I think it's fine as long as you're honest with your employer about it.

Otherwise you might be stepping on an employment agreement, or at least violating tacit trust.

I once did this by adding a short, written, non-lawyer addendum to my employment contract and had the company's lawyer sign it. That way you are (reasonably!) confident that (a) you're not doing anything illegal and (b) they won't claim you are later.

Even just a CLAIM of impropriety will cost you tens of thousands of dollars in legal fees. I've seen it happen to friends.

Just be honest!

Dale said...

Adding a addendum to your employment contract... interesting tactic!

I'm with you, honestly is the best policy. But it's kind of a tossup... Some companies feel threatened by any sort of making money on the side. So as long as there's no explicit clause that says you can't make money on the side, a "don't ask don't tell" policy might be OK. Either way, anything that could be constituted as impropriety or conflict of interest should NOT be done.

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