So, you’ve got a brilliant idea for a side hustle. Maybe you’re selling handmade candles on Etsy, doing freelance graphic design, or driving for a delivery app on weekends. Perhaps you’ve landed a part-time bar job to top up your income. Whatever it is, you’re not alone: millions of UK workers are doing exactly the same thing.
But here’s the question that keeps popping up: does your employment contract actually allow it?
The answer isn’t always straightforward. Your contract might have clauses buried in the fine print that could land you in hot water. Let’s break down everything you need to know about side hustles and employment contracts in 2026, so you can earn that extra cash with peace of mind.
The Side Hustle Boom: Why Everyone’s Got a Second Gig
Let’s be honest: the cost of living crisis hasn’t exactly gone away. Between rising rents, grocery bills, and energy costs, it’s no wonder that more people than ever are looking for ways to boost their income.
The stats speak for themselves. Estimates suggest that around one in four UK workers now has some form of secondary income, whether that’s a formal second job, freelance work, or a small business on the side. The gig economy is thriving, platforms like Vinted and Depop have turned selling into a genuine income stream, and remote working has made it easier than ever to juggle multiple commitments.
But just because everyone’s doing it doesn’t mean it’s automatically fine with your employer. Before you start your entrepreneurial empire (or even just pick up a few extra shifts elsewhere), you really need to check what your employment contract says.
Exclusivity Clauses: Can Your Employer Actually Stop You?
One of the most common restrictions you’ll find in employment contracts is an exclusivity clause. This is exactly what it sounds like: a term that says you can only work for your current employer and nobody else.
Now, before you panic, there’s some good news. The law in the UK has actually moved to protect lower-paid workers from overly restrictive exclusivity clauses.
Protections for Low-Income Workers
If you earn below the Lower Earnings Limit (which sits at around £123 per week in 2026), exclusivity clauses in your contract are unenforceable. This change was brought in to stop employers from tying people to zero-hours or low-paid contracts while preventing them from working elsewhere.
In practical terms, this means if you’re on a part-time contract with limited hours and modest pay, your employer generally can’t stop you from taking on additional work. It’s a welcome protection for those who need flexibility to make ends meet.
What If You Earn More?
For those earning above the threshold, exclusivity clauses can still be enforceable: but they need to be reasonable. An employer can’t simply blanket-ban you from all other work without a legitimate business reason.
The key is to actually read your contract. Look for terms like:
- “You shall devote your full time and attention to the Company”
- “You may not engage in any other employment without prior written consent”
- “You agree not to undertake any work, paid or unpaid, that may conflict with your duties”
If you spot something like this, don’t assume you’re stuck. These clauses are often negotiable, especially if your side hustle has nothing to do with your day job.
Restrictive Covenants: Where It Gets Complicated
Beyond exclusivity clauses, there are restrictive covenants to consider. These are the big hitters when it comes to limiting what you can do outside of work: and they can cause real problems if you’re not careful.
Non-Compete Clauses
A non-compete clause typically prevents you from working for a competitor or starting a competing business while you’re employed (and sometimes for a period after you leave). If you’re a marketing manager thinking about launching a freelance marketing consultancy, this is where alarm bells should ring.
However, non-compete clauses aren’t automatically enforceable. Courts in England and Wales will only uphold them if:
- The employer has a legitimate business interest to protect (like trade secrets or client relationships)
- The restriction is reasonable in scope, geography, and duration
- It goes no further than necessary
The more senior you are, the more likely a non-compete will be enforced. A junior admin assistant starting a weekend dog-walking business? Probably fine. A senior sales director launching a rival consultancy targeting your employer’s clients? That’s a different story entirely.
Non-Solicitation Clauses
These stop you from poaching your employer’s clients or colleagues for your side business. Even if your contract doesn’t have a strict non-compete, it might prevent you from approaching people you’ve met through work.
Conflict of Interest
Many contracts include a general duty to avoid conflicts of interest. Even without a specific clause, your employer could argue that your side hustle competes with them or diverts your attention from your main job.
The bottom line? If your side hustle is even remotely related to what your employer does, tread carefully and get proper advice.
Transparency: Should You Tell Your Boss?
Here’s a question we get asked all the time: do I have to tell my employer about my side hustle?
The answer depends on your contract. Some contracts explicitly require you to disclose any secondary employment or business interests. Others stay silent on the matter. If yours requires disclosure, failing to mention your side gig could be treated as a breach of contract: even if the work itself wouldn’t otherwise be a problem.
Even if disclosure isn’t mandatory, there are good reasons to be upfront:
- It builds trust. Your employer is less likely to be suspicious if you’re open about what you’re doing.
- It avoids nasty surprises. Better to have the conversation now than face disciplinary action later.
- It gives you protection. If your employer agrees in writing that your side hustle is fine, you’ve got evidence if questions arise down the line.
A quick, honest chat with your manager (or HR) can often smooth things over. Most reasonable employers won’t object to you walking dogs on Saturdays if it doesn’t affect your performance or compete with their business.
Guidance for Employers: Getting Your Contracts Right
If you’re on the other side of this: running a business and managing staff: it’s worth reviewing your employment contracts to make sure they’re fit for purpose in 2026.
Blanket bans on all secondary employment are increasingly seen as heavy-handed and can damage staff morale. Instead, consider:
- Clear, proportionate restrictions that protect genuine business interests without overreaching
- A disclosure requirement so you know what your team is up to
- Specific protections around confidential information, intellectual property, and client relationships
- Regular reviews of your contracts to reflect changes in the law and your business
If you need help updating your contracts or drafting new ones, our commercial law team can guide you through the process.
What Should You Do Next?
If you’re thinking about starting a side hustle: or you’ve already got one: here’s a quick checklist:
- Dig out your employment contract and read it properly. Look for exclusivity clauses, restrictive covenants, and disclosure requirements.
- Assess the risk. Is your side hustle in any way related to your employer’s business? Could it be seen as a conflict of interest?
- Consider disclosure. Even if it’s not required, being upfront can save headaches later.
- Keep things separate. Don’t use your employer’s time, equipment, or confidential information for your side business.
- Get advice if you’re unsure. Contract language can be confusing, and the stakes can be high.
Let’s Talk About Your Contract
Not sure where you stand? Worried about a clause that seems overly restrictive? Or maybe you’re an employer who wants to make sure your contracts are up to date?
Either way, we’re here to help. At Judge Law, we offer straightforward, practical advice on employment law matters for both individuals and businesses across Windsor and beyond.
Get in touch with us today for a friendly chat about your situation. We’ll help you understand your rights, review your contract, and make sure you can pursue your side hustle with confidence.
