Investing can be a sideline

When employees want to do a sideline

What the employee does after their working hours

If the employment contract speaks of a secondary job, all those activities are meant that are carried out by the employee outside of the main working hours in which he works for the main employer. Secondary employment can therefore include:

  • another job with another employer or a second job with the main employer.
  • Likewise, unpaid work or voluntary work is to be understood as a sideline.
  • But a temporary contract for work and services or self-employment as a part-time job also represent a part-time job.

The rules and obligations that apply in connection with the secondary employment of employees are not only applicable to full-time employees. Part-time employees are also subject to the regulations on secondary employment, which we will deal with in more detail below. This applies in principle and regardless of how much or little time is used for part-time and secondary employment. The fact of a part-time job remains the same - regardless of whether it is in addition to full-time or part-time employment.

Outside job? No problem, huh?

In principle, the employer may not forbid his employees to take part in secondary employment - provided that the employee does his or her actual work properly. But as soon as the employee neglects his main employment relationship due to a secondary activity, the secondary activity of the employee has negative effects on the employer. Negative consequences can be:

  • Tiredness and / or exhaustion,
  • lack of concentration,
  • Impairment through injury or even
  • Absenteeism of the employee during main working hours.

Note the maximum weekly working time

Secondary employment must also be restricted if the statutory daily working hours are regularly exceeded. The Working Hours Act (ArbZG) stipulates the following limits on working hours. Allowed are:

  • Max. 48 hours per week on six working days (Monday to Saturday)
  • Max. 60 hours per week on six working days, if compensation is made to an average of 48 hours per week within the next six months.

In addition, there must be a break of at least eleven hours between the end of work and the start of work. These regulations must be complied with for the secondary job together with the main job.

For example, if employees work 40 hours a week, the duration of the secondary job may not exceed eight hours per week. Otherwise, employees would exceed their maximum working hours of 48 hours. That would be a violation of the Working Hours Act. It does not matter whether you do the sideline in the evening or at the weekend.

Secondary job on vacation: not strictly prohibited

Certainly some employers and employees come up with the idea of ​​simply doing the secondary job while on vacation. However, the Federal Holiday Act (BUrlG) prohibits employees from doing “gainful employment that contradicts the holiday purpose” while on vacation. However, it is difficult to precisely define employment that is contrary to recreational purposes.

One thing is certain: It is not just a matter of the physical or mental exertion associated with an activity. Because a bike tour or volunteer work is allowed even if employees are exhausted. After all, this is not a job.

But even if the secondary activity is actually to be regarded as gainful employment during the vacation, it is not strictly forbidden, but only if it contradicts the recreational purpose. This is only the case, however, as soon as the secondary activity becomes too time-consuming according to the Working Hours Act. The labor courts are therefore responsible for defining clear boundaries in individual cases.

Wrongly worded in the employment contract = ineffective

In general, it is permissible to take on a part-time job. However, employers have the right to restrict the employee's opportunities to pursue secondary employment. This is to be recorded in the employment contract. However, it depends on the wording whether the restriction on secondary employment is effective.

  • Simply forbidding an employee to "engage in any paid or unpaid secondary employment" would result in an unreasonable disadvantage for the employee. This clause is therefore ineffective.
  • It is also not permissible to write that "any secondary activity requires the prior consent of the employer", since it is not sufficiently clear under which circumstances a permit is granted.

Obliging employees to report secondary employment

Only if you as an employer formulate a proper passage in the employment contract in which

  • the possible variants of secondary employment (e.g. self-employed secondary employment) and
  • the requirement that must be met in order to be granted a permit for secondary employment (e.g. safeguarding the employer's interests),

are included, a clause restricting secondary employment in the employment contract becomes effective.

But if it is an employee in a managerial position who represents a large corporation externally, employers are even allowed to restrict the employee's privacy to a certain extent. For example, employers can dictate to executives that they refrain from certain secondary activities and that they must even take into account the "legitimate interests of the employer" when organizing their leisure time.

If employers do not stipulate any regulations on the subject of secondary employment in the employment contract, this is permitted for the employee, even without having been expressly approved by the employer. Because without a contractually stipulated agreement, the employee can pursue any secondary activity in his spare time, in compliance with the law.

When does the sideline become a competition?

Much more important than the mere question of whether employees have a secondary job can in some cases be the question of the type of secondary job. Because as soon as employees have a secondary job that takes place in the employer's business area, there is a risk of competition. In general, employees are committed to loyalty and loyalty to their employer. Thus, the law allows the employer to prohibit employees from competing. This includes:

  • the participation including the influence on the management in a competing company of the employer,
  • granting a loan to a competitor as well
  • poaching customers and employees of the employer for one's own secondary employment.

These competitive activities serve the purpose of generating your own company profits. Since this damages the employer's business, he has the right to make use of the non-competition clause. Instead, employees are allowed to work on a sideline basis in another line of business. They are also allowed to take a small stake in another company, for example in the form of shares. As long as this participation remains in the context of the small system of consumers, it is permitted under labor law.

Sideline competition: the consequences

Should employers find out that employees have become competitors with their secondary employment, they have the option of issuing warnings to their employees or, in severe cases, even terminating them. If the employer wishes to maintain the employment relationship, he can demand that the employee give up the competing secondary activity.

In addition, employers have a right to compensation. This can be equal to the profit that the employer was unable to achieve through competitive activity. However, it must be proven here that the employer would have actually achieved these profits even without the competitive activity.

However, the employee's profit that he has earned through his competing secondary activity can also be demanded. As a general rule, if an employee's secondary activity has resulted in illegal competition, employers should definitely consult a lawyer who can better assess the effects of the secondary activity.

5 tips for dealing with secondary employment of employees

  • Record in the employment contract: If self-employed persons are informed about the secondary employment of their employees and they want to restrict this, this must be recorded in advance in the employment contract. Otherwise, founders have no right to be informed about secondary employment.
  • Formulate legally valid: The limitation of secondary employment must be made in writing in the employment contract and must be formulated in a legally correct manner. Fuzzy statements and the prohibition of any secondary activities without making it clear which conditions apply are ineffective.
  • Conduct an employee interview: When employees register a second job that is a second job, employers should seek the performance appraisal to find out whether employees are dissatisfied with the tasks (insufficient demand) or the salary (underpaid).
  • Promote employee motivation: Employers can then also use the appraisal interview to renegotiate the employee's salary or tasks. In this way, employees can be motivated to get more involved in the company instead of investing their energy in a second job.
  • Observe legislation: Legal regulations for secondary employment can be found in labor and service law as well as in social security and tax law. The best way to approach the subject is with a lawyer by your side who knows which regulations apply and must be observed.

A passage about secondary employment is just one of many building blocks that belong in every employment contract. We explain to you what other entrepreneurs need to look out for.

Employment contract guide
Author: Für-Grü editors

As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Grü for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Grü, he advised listed companies in the field of financial market communication.