In some workplaces, employees stay late — not to finish pressing company projects — but to use their employers' resources to pursue unauthorized side work. These workers might use their employers' equipment and materials, not to mention run up utilities costs. Although side jobs may seem benign relative to outright theft, they can be costly in ways you might not have imagined.
Abuse of company resources — for example, computers, printers, paper and electricity — is the most obvious risk of after-hours hustles. Tools used for personal projects may wear out faster or break without direct supervision. What's more, products created with company tools can blur ownership lines, especially if those products rely on your proprietary technology.
Also consider what might happen if an employee is injured, or injures someone else, while working off-the-clock in your office or factory. Your company could be held liable, especially if a manager knew about the activity and didn't do anything to stop it. Then there's the risk of employees claiming overtime for hours they're actually spending on their own projects.
Employees may think their activities are harmless, particularly if management hasn't explicitly forbidden such activities or is inconsistent in enforcing rules. But if you don't establish and enforce rules and monitor workers, side jobs can evolve from one-off projects to routine misuse of resources and ongoing fraud.
Stopping employees from engaging in after-hours hustles requires several simple yet effective controls, starting with a written policy prohibiting the practice. Your policy should stipulate what constitutes business property and how it can be used, when employees are allowed to be on your premises, and what approval they need to work on-site after hours. Be explicit about what qualified as overtime and who must approve it. And make sure the same policies apply to management as to ordinary workers.
Consider these additional control measures to help reduce financial and operational risk:
Most employees who work late are on-site to perform legitimate company projects, not to pursue side hustles. So be careful not to accuse someone of misuse or fraud unless you have good evidence of bad intent. After all, you likely want to encourage workers to assume ownership of their work and assert initiative! The best way to prevent after-hours hustles is to balance trust with structure. Contact us to investigate any suspicious activities, conduct a risk assessment and implement internal controls to help prevent financial losses.
Get in touch today and find out how we can help you meet your objectives.
