Overemployment – A Dangerous Juggling Act

In today’s fast-paced and interconnected world, and in light of rapidly increasing cost of living, the practice of overemployment—working two full-time jobs simultaneously—has become a growing trend. So much so that major news agencies are covering the practice, and a website exists specifically for the purpose of helping remote workers in getting ‘overemployed’.

While tempting for some employees seeking increased income or diverse experiences, and while a difficult practice for employers to identify and prevent or regulate, there are a host of legal risks associated with this practice.

In this article we’ll review some typical employment agreement terms, some of the legal traps for employees and employers a like, and provide some helpful tips to both employees and employers to avoid them.

Typical Employment Agreement Terms

Here are a few employment agreement terms relevant to overemployment.

Exclusivity
Exclusivity is a common term in employment agreements. In fact, exclusivity is a key factor in establishing whether a relationship is indeed an employment or contractor relationship.

Some employment agreements expressly permit work outside of the employment arrangement, but will often qualify the extent of such permission. Typical wording would permit additional work provided that that additional work does not adversely impact a worker’s ability to perform their duties under the employment agreement.

Some exclusivity clauses require the employee to obtain consent before engaging in work outside of the employment arrangement.

Regular Working Hours

Most employment agreements also specify when the employee is to perform work under the agreement, often during ‘regular business hours’. Employment contracts will often specify exactly what those working hours are.

Working a second and unrelated job during the hours an employee is to be paid by their employer could result in termination for cause and, as above, potentially a claim of fraud depending on the circumstances.

Compensation

Employment contracts may set out an hourly wage, salary, commissions, bonus or other compensation.

Monitoring + Time Entries

Employment contracts may also include terms permitting the employer to monitor an employee’s activities via digital means and obligating employees to keep time entries, particularly when working remotely

Legal Risks

Here are a few legal risks for both employees and employers related to overemployment.

Breach of Exclusivity Clause

If a contract specifies that employment is to be exclusive, or specifies what hours the employment duties are to be performed, overemployment could constitute a breach of contract, and potentially cause for termination if the employee is employed by a second employer and performs these other duties during the specified hours in the first employer’s contract.

If the employee lies to or purposely deceives the employee respecting their double employment, an employer may also be able to argue that the employer behaved fraudulently.

We are not aware of any cases dealing with this particular issue to date in Canada.

Time Theft

If an employee is being paid to perform their duties for or during a specified number of hours, either as a salaried or hourly employee, and the employee is paid for those hours but does not actually perform the work or artificially inflates their time entries, the employee could be liable for time theft.

A recent decision dealt with this particular issue, finding in favour of an employer that was a victim of an employee receiving payment for time they did not actually work.

Performance Issues

Employees juggling two jobs, even if legally permitted under their employment contracts and/or consented to by their employer may struggle to meet the demands of multiple jobs.

Performance issues can result in termination for cause, but typically only if the employer has taken steps to support the employee with addressing their performance deficiencies.

Wrongful Termination

Employers have strict obligations respecting termination of employees. Cause is very difficult to establish, and unless a written contract expressly limits termination pay to statutory minimums, termination pay can be much higher than the minimums set out in the Employment Standards Act.

Aggravated and Punitive Damages

Aggravated damages are a form of compensatory damages awarded for actual losses suffered by an individual from particularly high-handed or reprehensible conduct.

Punitive damages are over and above compensatory damages and are intended to deter intentional and particularly bad behaviour.

These damages can be significant and in addition to general damages.

Tips for Employees and Employers

For Employees

Before engaging in overemployment:

1. Consult a lawyer. It’s always best to consult a lawyer. The contract terms, legal principles, issues and advice in this blog are informational only and limited in nature. These issues can be very complex. When in doubt, contact a lawyer!

2. Check your Contract. Check if your current employment agreement has an exclusivity clause or working hours or whether consent is required. Make sure you follow the terms of your employment contract and honour your working hours, and obtain consent if required.

3. Reach Agreement. The lowest risk option is always to inform each employer and ensure it is permitted and accepted to avoid undesired conflict. Your employer can’t place restrictions on you that aren’t in your contract or otherwise reasonable.

4. Be Realistic. Working two or more jobs can be tough. Be realistic about whether you can meet both employer’s requirements effectively and in compliance with the applicable agreements along with your personal and familial obligations.

5. Track Your Time and Activities. Being able to demonstrate what you did, and when, while working for any employee will be helpful even if you are permitted to have multiple jobs. It can be helpful to have this evidentiary record should any dispute arise.

For Employers

With overemployment as a growing trend and remote work and hybrid work becoming the norm, employers should be proactive in addressing overemployment, including in policy adoption, ensuring contracts are properly drafted, monitoring employees and enforcing employee obligations. Here are a few tips for employers.

1. Consult a Lawyer. It’s always best to consult a lawyer. The contract terms, legal principles, issues and advice in this blog are informational only and limited in nature. These issues can be very complex. When in doubt, contact a lawyer!

2. Adopt a Policy. Employers should discuss their position on overemployment and reach a clear policy on whether it is permitted, and if so in what circumstances. If your current employment contracts permit the company to enact policies and obligates employees to abide them, you might be able to institute a policy respecting overemployment company wide without amending employment agreements. The policy terms must be reasonable. There are many traps with making significant changes to an employee’s agreement, and this type of policy could create issues at implementation if there is no written contract or where the contract doesn’t permit the employer to create policies during employment.

3. Written Contracts. Have a written employment contract that expressly addresses working hours, exclusivity, overemployment, monitoring rights and workplace policies.

4. Monitoring. Employers should determine how they will monitor and manage remote employees and ensure that they have reasonable ways to ensure remote employees are performing to expectation and obligation. Provided the contract permits it, you can track employee activity using tools like TimeCamp, Microsoft 365 Enterprise monitoring tools and other programs. You can also establish whether an employee is working by monitoring email, phone, work chat, status and document activity. Employers might consider adopting a company wide policy of time tracking for remote and hybrid workers, and should closely monitor and record breaks, days off and vacation time.

5. Managing Performance Issues and Terminations. Keeping in mind that cause is particularly difficult to establish and the law’s view of employer’s as powerful and employee’s as vulnerable, employers should ensure their contract include limitations on severance pay, communicate with employees respectfully, supportively and responsively respecting performance and enforcement issues, and use termination as a last resort. Enforcement should be incremental and employers should provide training, support and other resources to struggling employees. Termination should only occur once other efforts have been exhausted and termination for cause should only be alleged if the employer has a strong evidentiary basis for such termination and has made significant efforts to address performance issues.

6. Be Reasonable. With rising cost of living and the housing affordability crisis, employers need to be reasonable with employer’s and realistic respecting their economic circumstances. Clear, collaborative, supportive and reasonable communication and policies are essential to maintaining good corporate culture, positive employee relations and avoiding costly disputes

7. Insurance. Consult with your insurance advisor regarding employment related coverages including employment disputes like wrongful termination and employee dishonesty.

Remote and hybrid work are here to stay, and overemployment might be too. We hope this general information is helpful, and please don’t hesitate to reach out to one of our team members if you have any questions or concerns regarding overemployment.

[email protected]

60.900.7611

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This blog contains non-fact specific, general legal information. This blog cannot be relied upon as legal advice and is not intended to be so relied upon. If you require legal assistance, reach out to a lawyer.