Need the cash and have untapped talent? Try for extra work outside your regular day job

In these difficult times, when job losses and salary cuts have become the new normal, smart millennials – and even experienced office goers – have increasingly looked at building a second source of income. There’s a new word for this now: gig economy. So, assignments such as online tutoring, developing content and graphic and teaching part-time at professional institutes are some such avenues. The idea is to put your additional talent to good use and earn some money out of it.

“People have been trying multiple things to sustain and survive during difficult times. There is an 8-10 per cent growth in gigs compared to the Unlock 1 phase. If moonlighting (as it is called in HR parlance), can be done with employer consent, it can open up multiple channels,” says Kaushik Banerjee, VP and Business Head, Teamlease.com and Freshersworld.com.

A back-up plan in times of distress

The thought of losing a job – or facing a pay cut – can be unnerving. A supplementary source of income can cushion the income loss and keep you afloat during such phases. “Moreover, such assignments will help you polish your entrepreneurial talent. They can be your first step towards becoming an entrepreneur in the long run,” says Melvin Joseph, Founder, Finvin Financial Planners.

Sayantan Ghosh, Robotics professional; Side gig: Online tutoring for students in India and UAE; I arrange classes early in morning, before I start work. At times, I have even organised classes during lunchtime.

Take the case of Kolkata-based Sayantan Ghosh, for instance. Employed with a robotics company, Ghosh also conducts online classes for STEM (science, technology, engineering and mathematics) students in India and the UAE, after having taken his employer’s permission. “I arrange classes early in morning, before I start work. At times, I have even organised classes during lunchtime,” he says. With virtual classes becoming a reality across the world after the COVID-19-induced lockdown, the demand for online tutors has only grown. “For 40 online classes of 30 minutes each, the fees can work out to Rs 10,000-12,000 per student,” he adds.

Like Ghosh, Nivedita Roy is also a salaried employee based in Bangalore. The IT professional’s entrepreneurial journey started last year, when she and her husband visited her hometown in Assam. “My husband was highly impressed with the quality and variety of tea available in the state as well as in Darjeeling. His experience inspired us to launch our tea brand – Goodness of Heaven – in Bengaluru. The idea is to source the products from Assam and Sikkim and sell it to our clients at reasonable prices,” explains Roy. A back-up source of income can come in handy at least to meet regular expenses in a crisis. “We have seen people being laid off, no matter how capable they are. A second source of income can ensure that we do not end up taking up unsuitable jobs in desperation,” she adds, while still being employed at her technology company.

Nivedita Roy, IT professional; Side gig: Marketing and distributing tea brands from Assam and Sikkim in Bengaluru; A second source of income can ensure that we do not end up taking up unsuitable jobs out of desperation

Gigs and day job must peacefully co-exist

If you wish to have a go at it, check if your gig is in the same business as your normal day job. If the two are in the same industry, then it is typically frowned upon. If they are in unrelated lines of businesses, then there is no conflict of interest. This is the key clause you need to bear in mind if you plan to take on such side hustles. “You need to go through your employment contract thoroughly before accepting assignments. A lot depends on the wording. Sometimes, the terms may specifically state that you cannot take on any gigs for monetary considerations,” says Sonu Iyer, Partner, People Advisory Services, EY.

Likewise, be mindful of non-compete, intellectual property rights (IPR) and confidentiality clauses. Once you conform to the laid-out rules, employers, in fact, are likely to consider certain side hustles favourably. For example, guest lectures at premier professional institutes. “Employers are likely to allow such assignments as these activities can also act as brand enhancers for the organisations,” says Iyer.

Tejash Gandhi, Chartered accountant; Side gig: Visiting faculty at a Mumbai-based management institute. It was a win-win situation for all – me, the students, the college and also my employer. I had my company’s consent and there was no conflict of interest.

And, this is what chartered accountant Tejash Gandhi did until recently – he signed up as a visiting faculty at a management institute in Mumbai. “I taught at the college six hours a day during weekends, besides doing other tasks such as checking answer papers and conducting mock interviews. It was a win-win situation for all – me, the students, the college and also my employer. I had the firm’s consent and there was no conflict of interest. It also helped me enhance and refresh my knowledge,” he explains. His fees were paid on a per-hour basis.

“At your end, ensure that your gigs do not come at the cost of your primary job. Keep the employer informed throughout, seek consent in writing and do not use office hours or resources for these tasks,” says Iyer.

Let not social media posts hurt images

While the opportunity to have dual source of income may seem exciting, it comes with its share of risks. Conflict of interest is the key clause to watch out for. “It sets out restrictions on the nature of external or part-time work that an employee may undertake, and whether prior permission is necessary. Additionally, since part-time activities in today’s age may involve use of various social media and other online platforms, check the social media or Internet policy of your employer to ensure there are no restrictions,” explains Rashmi Pradeep, Partner, Cyril Amarchand Mangaldas.

In some cases, depending on the organisation you work for, having more than one source of income will simply not be allowed. “Factories Act 1948 clearly mentions that dual employment is not permissible. This, however, does not apply to all institutions, as not every organisation falls within the meaning of the factory under the Act,” says Anjali Raghuvanshi, Chief People Officer, Randstad India. In such cases, go through your contract to understand the specifics of this clause. “The employment agreement must state the restrictions placed on double employment and that employees are prohibited from engaging in additional employment or professions till they’re under their current employer’s services,” she adds.

It is important to plug all gaps, as the consequences of violating employment contracts can be severe. “The consequences which could range from a warning to termination from employment (to be determined commensurate to the gravity of the employees’ actions),” explains Rashmi. In certain cases, if an inquiry concludes that employees have violated the terms and caused financial or reputational loss to the company, it can also initiate a suit for damages. “If the employees’ actions are grave and involve breach of trust, fraud etc. the possibility of criminal action cannot be ruled out,” she adds.

Hence, it is best to consult your employer and take a written consent from your reporting authority or HR before embarking on your entrepreneurial journey while holding on to your job.

Tax tangles

The legal angle apart, you need to understand the tax implications on this extra income stream. “Such income would be taxed under the head ‘Income from Business or Profession.’ You will not be able to use tax return forms ITR-1 or ITR-2. You will have to use either ITR-3 or ITR-4. ITR-3 will enter the picture if you have also made capital gains. While ITR-4 is a simple form, ITR-3 necessitates extensive details,” says Karan Batra, Founder and CEO, Chartered Club.