Entrepreneurship & Small Business

Can employer find out about my side business

  • Last Updated:
  • Jun 29th, 2020 10:31 am
[OP]
Newbie
Aug 24, 2014
21 posts
11 upvotes

Can employer find out about my side business

Hi all,

I have a full time job that I like and I'm planning to keep. I do however need some extra income to be able to apply for mortgage. I have an opportunity to work on the weekends, but I need to register a small business in order to be able to receive the compensation.
I've gone through the contract I have with my full time employer and it states that I agree to devote all my time during working hours to them and that I will not take other employment without their approval.
I know them enough that if I ask for their approval, they will say no, so I won't bother even trying.

What are the ways my employer can figure out that I have a second job assuming that:

I will register my business as a "Sole proprietorship".
I will of course do my best as before during working hours at my primary job, so I will not under-perform.
I will not post anything online about my second job.
I will have to file taxes for both income sources.

Thanks
21 replies
Jr. Member
Apr 2, 2020
191 posts
73 upvotes
LaC418 wrote: Hi all,

I have a full time job that I like and I'm planning to keep. I do however need some extra income to be able to apply for mortgage. I have an opportunity to work on the weekends, but I need to register a small business in order to be able to receive the compensation.
I've gone through the contract I have with my full time employer and it states that I agree to devote all my time during working hours to them and that I will not take other employment without their approval.
I know them enough that if I ask for their approval, they will say no, so I won't bother even trying.

What are the ways my employer can figure out that I have a second job assuming that:

I will register my business as a "Sole proprietorship".
I will of course do my best as before during working hours at my primary job, so I will not under-perform.
I will not post anything online about my second job.
I will have to file taxes for both income sources.

Thanks
This is a personal decision of course, and it depends on the relationship you have with your employer, but you should consider telling them about your small business. If you explain to them that you are planning to stay on with them and are trying to save up to buy a house they may understand, whereas if they find out from someone else, they may not.
Deal Addict
Jul 30, 2015
2583 posts
1555 upvotes
Toronto, ON
You need to weigh what happens if they find out. What if you take a business call while working for them during a weekday or respond to an email?

I would tread carefully.
Deal Addict
May 12, 2014
2890 posts
2613 upvotes
Montreal
First think of the worst case scenario: if they find out and terminate your employment, could you easily find another job?

As to how they could find out? Disgruntled co-workers, ex-spouse, overheard conversation, misdirected email, web search ...
Deal Fanatic
User avatar
Dec 20, 2004
5359 posts
1553 upvotes
Toronto
Good lord don't even think about it - go ahead and do it. This is how you get ahead in life... not by being a mindless corporate drone.

They cannot find out unless you make it explicitly obvious to them, and it's extremely unlikely they would even be looking in the first place. Most companies just expect their employees to be mindlessly obedient.

You don't owe them an explanation either. Their job as a company is to exploit your labour for corporate gain, and your job as a person is to do whatever is best for you.
Deal Addict
Jun 27, 2006
1679 posts
1967 upvotes
gei wrote: Good lord don't even think about it - go ahead and do it. This is how you get ahead in life... not by being a mindless corporate drone.

They cannot find out unless you make it explicitly obvious to them, and it's extremely unlikely they would even be looking in the first place. Most companies just expect their employees to be mindlessly obedient.

You don't owe them an explanation either. Their job as a company is to exploit your labour for corporate gain, and your job as a person is to do whatever is best for you.
OP, if this new business is in a different sector all together, there shouldn't be a conflict. It is your own time. Up to you to look after your interests, as the company probably will not.
[OP]
Newbie
Aug 24, 2014
21 posts
11 upvotes
Thanks for all the great comments guys! I will move forward with my plan...
Deal Addict
Jul 13, 2009
4580 posts
2687 upvotes
LaC418 wrote: that I will not take other employment without their approval.
I know them enough that if I ask for their approval, they will say no, so I won't bother even trying.
This is where you have to be careful. If they find out, they could use this as a way to let you go.

So never speak a word of it or approach them but be clear that it's restricted to weekends only and no conflict of interest.

Some companies are highly sensitive about this.
Sr. Member
Jan 28, 2017
732 posts
784 upvotes
Markham
gei wrote: Good lord don't even think about it - go ahead and do it. This is how you get ahead in life... not by being a mindless corporate drone.

They cannot find out unless you make it explicitly obvious to them, and it's extremely unlikely they would even be looking in the first place. Most companies just expect their employees to be mindlessly obedient.

You don't owe them an explanation either. Their job as a company is to exploit your labour for corporate gain, and your job as a person is to do whatever is best for you.
This. All corporate cares about is their bottom line. They couldn't give two shits about your personal well being or development.

Unless your side business is directly related to your day job or industry you work in, I don't see why you would have to disclose anything. Obviously, don't do something stupid like hit up your coworkers for business or something.
Deal Addict
May 12, 2014
2890 posts
2613 upvotes
Montreal
Is your second job at all related, even indirectly, to your first?
Member
User avatar
Nov 23, 2014
490 posts
464 upvotes
Toronto, ON
LaC418 wrote: Hi all,

I have a full time job that I like and I'm planning to keep. I do however need some extra income to be able to apply for mortgage. I have an opportunity to work on the weekends, but I need to register a small business in order to be able to receive the compensation.
I've gone through the contract I have with my full time employer and it states that I agree to devote all my time during working hours to them and that I will not take other employment without their approval.
I know them enough that if I ask for their approval, they will say no, so I won't bother even trying.

What are the ways my employer can figure out that I have a second job assuming that:

I will register my business as a "Sole proprietorship".
I will of course do my best as before during working hours at my primary job, so I will not under-perform.
I will not post anything online about my second job.
I will have to file taxes for both income sources.

Thanks

Some employers like banks requires employees to disclose personal businesses .If your employers has not asked you for it ,then it should be OK
Some employers may have non-compete/integrity clauses etc..which may forbid you from engaging in a similar business as that of your employer

Read the terms of employment or check about the policy and disclose to your employer about your business to avoid any future conflicts
[OP]
Newbie
Aug 24, 2014
21 posts
11 upvotes
FrancisBacon wrote: Is your second job at all related, even indirectly, to your first?
No, not related at all. I should still ask for their permission though, according to the contract. However, asking for permission is like raising the flag that you are up to something so no, I'm not asking for permission. I'll just go ahead and do it.
Deal Fanatic
User avatar
Jul 26, 2007
5287 posts
2846 upvotes
Toronto
LaC418 wrote: No, not related at all. I should still ask for their permission though, according to the contract. However, asking for permission is like raising the flag that you are up to something so no, I'm not asking for permission. I'll just go ahead and do it.
Either fully disclose what you are up to here and let interwebstrangers decide for you or discreetly go do about your sidejob without adverts and no word of mouth. More you spread any news about your new enterprise, there will be more chance your work peeps will find out.
Deal Addict
Jun 24, 2015
4525 posts
1335 upvotes
Woodbridge, ON
in all honesty, if you told them your doing babysitting or childcare on the side, i think they will be like okay and brush it off as nothing to worry, so do they REALLY need to know what you do on the side? probably not, you can tell them your working at your fathers restaurant, etc, i think that clause where you have to tell them when your working another job on your off time is more to protect them from people doing a conflict of interest like working for a competitor, for stuff like cutting grass or babysitting or cooking or helping at a restaurant on your spare time they should not give a damn about, go ahead and do it, start your side business, i worked at a grocery store on the side to help pay down my debits no one seemed to care when i told them about my side job.
Hi
Deal Addict
Jan 21, 2018
4356 posts
4416 upvotes
Vancouver
The reason that many employers have this clause in the employment agreement is that they know it is likely to cause poor performance at your primary job if you take on a second job.

So if you start turning in a poor performance and you get terminated as a result, does it really matter if you got away with cheating on your employment agreement? Conversely, if you keep turning in a good performance, your employer will have no reason to go looking at your outside activities.

But in my experience people working a 2nd job and thinking that their employer won't find out are taking more of a gamble than they think. Working two jobs does have a noticeable effect, and people aren't as skilled as they think they are at fooling others who work closely with them.
Deal Addict
Jun 24, 2015
4525 posts
1335 upvotes
Woodbridge, ON
some people work a second job on weekends when they are not affected by their primary job, this obviously should not affect their work performance as the weekend is their time off work. Also, some people have 2 PART TIME jobs, one can be from sun-wed and the other can be thurs to sat. If you work Part time and are hungry for more money obviously this is a good thing and they should not pinalize oyu
Hi
Deal Fanatic
User avatar
Jul 26, 2007
5287 posts
2846 upvotes
Toronto
GoodFellaz wrote: some people work a second job on weekends when they are not affected by their primary job, this obviously should not affect their work performance as the weekend is their time off work. Also, some people have 2 PART TIME jobs, one can be from sun-wed and the other can be thurs to sat. If you work Part time and are hungry for more money obviously this is a good thing and they should not pinalize oyu
In OPs case, it written on his contract to not do this. But he wants to.
[OP]
Newbie
Aug 24, 2014
21 posts
11 upvotes
Thanks for the input everyone!

I've already started working on the weekend. What would be the best way to manage the extra income. I did a lot of reading on opening a master business license for sole proprietorship.
It turns out that I don't really need to register for MBL. I can just invoice under my own name. I've also read that I don't need a small business account, I can just use a separate personal bank account to keep the two income sources on two separate accounts. Some people say that even the second account is not needed if payments will only be coming from one source (other than my principal employer). I've checked with my bank what would it take to open a second checking account. It would be free, but when I tried to request one online, the bank started to ask questions about my employment status, which they already know. I didn't feel right answering that question, so I just cancelled the request.
So I'm planning to pretty much leave everything as is:

- not registering for a master business license
- not opening a small business account
- not opening a second checking account

I'm just planning to invoice everything under my name and I have the funds deposited to my single checking account. The funds will always come from the same source. I will claim the extra income
At the end of the year on a T1 form. I will move whatever I can from higher tax brackets to RRSP or TFSA.

Would anyone recommend to do this a bit differently?
Newbie
May 15, 2020
87 posts
58 upvotes
Thornhill ON
I believe you cannot claim GST/HST back (Input Tax Credit) if you do not register. This may or may not be material to you, so you may need to look into it and decide.
Newbie
Oct 1, 2019
75 posts
22 upvotes
If you separate your banking and bills personal from business, your accountant should have an easy time separating everything. You don't need to register a business to create invoices and work independently but some license might make you look more professional especially if you intend to grow this thing beyond the weekends. I'll pm you my accountant's info if you want to ask questions on setup if there is any advantages for you but I think S.P. should be fine.

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