How to Create an Inclusive Policy for Employee Side Hustles

Why Side Hustles Matter More Than Ever

In today's fast-moving economy, many employees are turning to side hustles. Whether it's selling handmade products online or providing freelance services after work hours, side gigs offer financial relief, creative expression, and even community building. But how do you, as an employer, embrace this trend without compromising your business interests? The answer lies in crafting an inclusive and thoughtful side hustle policy. Within the first 100 words alone, it's clear that an inclusive policy for employee side hustles isn’t a luxury—it’s a modern workplace necessity. Let’s explore how policies rooted in empathy and collaboration can actually lead to a stronger, more dynamic workplace.

The Rising Appeal of Side Hustles

Think back to someone you know who turned a hobby into a profitable venture. These stories aren't rare anymore—they're increasingly common. According to Deloitte, nearly half of millennials and Gen Z workers have at least one side hustle. These secondary streams of income aren't just about extra cash; they're about identity, autonomy, and personal growth. For many, their side hustle is a creative outlet that brings passion back into their everyday lives. As an employer, recognizing this trend helps you keep pace with employee expectations and attract top talent who value flexibility and openness.

The Company Perspective: Understanding Risks and Rewards

Of course, companies can’t ignore potential risks. What if an employee’s side business conflicts with your core offerings? What if productivity drops or sensitive information is misused? These concerns are valid. However, painting all side hustles with the same brush is short-sighted. Not all side gigs are detrimental—in many cases, they can enhance skills that positively benefit your organization. For instance, an employee who teaches coding online might sharpen their technical mentoring abilities. The key is to set up boundaries that support creative endeavors without undermining your operational needs.

How to Draft an Inclusive Side Hustle Policy

Ready to build a policy that reflects both empathy and business sense? It’s easier than you think. Creating an inclusive policy for employee side hustles begins with open dialogue and a transparent framework. Here’s how to break it down:

1. Define What Qualifies as a Side Hustle

• Clarify whether passive income counts (e.g., rental properties, stock trading).

• Distinguish between creative outlets and business ventures.

• Use inclusive language that avoids ambiguity or legalese.

Having clear definitions sets expectations from the start and ensures consistency when applying your policy across teams.

2. Set Transparent Guidelines on Conflicts of Interest

• Require disclosure of side hustles that may intersect with your industry.

• Identify intellectual property risks ahead of time.

• Clarify what's considered competition and how that affects employment status.

Think of this as laying guardrails—you're not blocking the path, you're simply making it safer for everyone involved.

3. Incorporate Flexibility into Work Hours and Locations

• Allow remote or flexible work where feasible to give employees time back.

• Encourage results-driven performance over rigid time tracking.

Jane, one of our marketing leads, started painting during the pandemic. Her artwork eventually led to weekend art markets—and surprisingly, a reinvigorated sense of creativity at work. When we supported her with a bit of flexibility, her productivity didn’t fall; it skyrocketed. That’s the power of flexible, inclusive environments.

4. Build a Culture of Trust and Disclosure

• Host regular check-ins or anonymous surveys about employee goals.

• Make disclosures non-punitive—focus on collaboration, not punishment.

• Create a digital system for submitting and approving side projects with simplicity in mind.

Employees are more likely to be upfront when they feel their organization supports them. Imagine if side hustles were cross-pollinated into your internal upskilling programs. The results might surprise you.

Balancing Legal Compliance and Human Empathy

Every business must navigate legal terrain responsibly. Legal teams often worry about labor laws, non-disclosure clauses, or ethical violations when employees moonlight. But rather than scaring employees into silence, a well-written policy can offer peace of mind. Make sure to include:

Employee Classification Awareness

Employees should understand what is permitted under part-time and full-time roles, especially if they’re salaried. Provide legal resources or a quick FAQ for clarification.

Intellectual Property Ownership

Clarify what assets belong to the company (e.g., inventions created using company tools or during work hours) and which are excluded.

Privacy and Confidentiality

Reinforce the importance of data protection. For instance, someone working in HR should never use company insights when starting a recruitment side business.

Empathy and compliance shouldn’t be at odds—they should work together in an effective side hustle policy. A strong foundation fosters respect, communication, and continued trust on both ends.

What the Future of Inclusive Workplace Policies Looks Like

Imagine a workplace that not only permits side hustles but celebrates them. Where companies set up optional workshops for aspiring entrepreneurs. Or where internal job boards highlight employee-run ventures during company fairs. This isn't wishful thinking—some companies are already making it a reality. Think Etsy employee marketplace launches or Adobe's internal innovation time. These models prove that supporting side hustles can build loyalty, engagement, and a more empowered workforce.

The next time an employee mentions a budding business idea, how will you respond? With doubt or encouragement?

Quick Takeaways for Employers

1. Lead with curiosity—not control. Ask, "How can we support this?" rather than "How does this affect us?"

2. Create accessible, clear side hustle policies for all departments.

3. Empower managers to champion these values—not just HR teams.

4. Refresh the policy annually to stay ahead of work-life trends.

Inclusive policies aren’t about micromanaging—they’re about trust and adaptability. And in a world constantly shifting, that might be your most competitive advantage.

FAQ: Inclusive Side Hustle Policies

1. Should all side hustles be disclosed to HR?

Not necessarily. Only those that might present a conflict of interest, use company resources, or reflect directly on the brand should be disclosed. A good policy will guide employees on when disclosure is needed.

2. Can side hustles increase employee turnover?

Possibly, but they can also boost retention. When employees feel trusted and free to pursue personal goals, they're more likely to stay engaged and loyal. Suppressing side gigs might lead to dissatisfaction or quiet quitting.

3. What if a side hustle conflicts with company interests?

That’s where transparency and early disclosure help. Your policy should outline what constitutes a conflict and how to handle it collaboratively—whether that means project modifications or mutual agreement on boundaries.

In the end, the best policies balance protection with empowerment. What could your workplace look like if it embraced the whole employee—passion projects and all?