Higher Pay Requests, Inappropriate Comments, and Side Hustles

Welcome back to another edition of HR Basecamp Roundup! This week, we tackle some interesting and common issues that come up in workplaces more often than you think. If you haven’t joined our HR Basecamp Facebook group yet, be sure to join so you can participate in these discussions in real time!

FREE Resources in this Roundup:

• Employee Concern Reporting Form
• Wage Whispers Article
• Wage Compliance Guide

1. Should I give in to an applicant asking for higher pay?

Question: I’ve really struggled to fill the front desk position at my office. The most recent candidate I interviewed seems to check all the boxes, and I feel pretty good about their ability to fill the role. However, they’re asking me to match their current pay, which is $5/hour higher than what the position is listed at. Financially, I think I can afford it. But is it a bad idea to give in to their request so early on?  I think I can have her sign a document stating that she will not disclose the significant increase to others once she starts working.

The Legal Side: There’s no law stopping you from offering more than what’s posted. However, there is a legal issue you need to be aware of when it comes to your idea of having her agree not to discuss wages. Our long-time readers are already familiar with what we are about to say. 

Thanks to the National Labor Relations Act (NLRA), employees have a protected right to discuss wages. That means if your existing team finds out the new hire is earning significantly more, and they want to discuss it, you can’t tell them to keep it quiet or discipline them for speaking up. And chances are they will talk. It also means that the agreement would be unlawful. That means it can be used in court against you. 

The Human Side: There’s nothing wrong with a candidate negotiating a higher wage; it can be a smart move on their part if they are bringing a lot of positives with them. The bigger question is: Does it make long-term sense for your business? We’d like to point out that you could negotiate too. Perhaps work something out that works for both of you over the next year, based on their performance. 

We also need to ask, have you done the work to create a pay scale so you know that the amount you are going to pay is competitive and leaves room for both sides to get what they need? 

Here’s how to think it through:

• Set a pay scale: If you haven’t already, now’s the time. Establishing a pay range for each role helps prevent overpaying or underpaying during the hiring process and provides a framework for future raises. 
• Think beyond today: If you start this employee at the top of your budget, what happens when they ask for a raise in six months? Are they likely to stay without a raise, or will this lead to future turnover?
• Consider the ripple effect: What happens when your long-time front desk assistant finds out the new hire is earning more? Be prepared for a challenging conversation to explain why the new employee possesses the necessary skills and experience to warrant the additional amount. It will happen when the existing employee comes in and demands a raise, which can then spark the entire team wanting to discuss compensation.
• Maybe try a sign-on bonus: If you’re not ready to raise the wage permanently, a sign-on bonus can be a smart compromise. It rewards the candidate without setting a long-term precedent. It’s a good idea to offer it in installments, such as half at six months and half at one year, to encourage retention. You could even address what their base rate of pay would go up to at the end of that period. Just make sure the details are laid out in the offer letter, and remember not to make this a contract!
• Offer a pay review: You could also offer the candidate a lower-than-asking starting rate and agree to revisit compensation after 90 days based on performance. This keeps the pressure off your payroll and ensures the hire is the right fit before you make a more significant investment.

Bottom line: Don’t be afraid to negotiate, but do it on your terms, with an eye toward consistency, fairness, and financial sustainability.

2. I’ve just learned that an employee is behaving inappropriately. Now what?

Question: It’s been brought to my attention that one of my male employees has made inappropriate comments to several female employees. The female employees didn’t make a formal complaint, but mentioned it in passing, saying that they had just brushed it off, even though they didn’t like what he was saying. Even though they didn’t “complain” about it, I want this to be addressed and the behavior to stop. How do I approach this?

The Legal Side: You can’t unhear things and pretend you don’t know. Even without a formal complaint, you have a responsibility to act. Employers are legally required to provide a safe and harassment-free work environment. If something inappropriate is happening, even if it’s only mentioned in passing, you’re on notice. And if it ever came out that you knew and didn’t respond, you could face a serious claim for not acting.

Remember our guidance: always act reasonably as if what is happening at work could escalate into something bigger or a legal issue.

Your next step is to investigate and document. Begin by speaking privately with each employee who has mentioned the issue. Try to gather more details about what was said, when it occurred, how often, and who else may have witnessed it. To help with documentation, you can use CEDR’s Employee Concern Reporting Form to collect their statements in writing. Once you have the information, determine whether this behavior violated your policies or applicable laws. Based on that, your response could range from coaching or a direct conversation to a final warning or even termination, depending on the severity.

The Human Side: You’re absolutely right to want to stop the behavior, even if no one filed a complaint. “Brushing it off” doesn’t mean it didn’t make someone uncomfortable. Many employees remain silent because they don’t want to rock the boat, especially if they’re concerned about retaliation or being perceived as difficult. But that doesn’t mean they’re okay.

When following up, do so with care and clarity. Let your team know you appreciate them speaking up, even informally, and that they won’t face any negative consequences for doing so. 

Then have a respectful but firm conversation with the employee whose behavior was out of line. Let him know the comments were inappropriate and that they need to stop, regardless of whether he meant harm. Creating a workplace that’s respectful, safe, and supportive doesn’t just protect you legally, it builds a culture your whole team can count on.

3. Can an employee work on their side hustle during work hours?

Question: My employee has a second job that I allow them to work on at work if it’s slow and there isn’t anything else to attend to. It doesn’t bother me, and they are good about only working on it if there really is nothing else to do. I received an anonymous complaint about this, claiming it’s not fair. However, it’s not as if this employee is being allowed to ignore their work to focus on their second job, and other employees aren’t being forced to pick up the slack. Is it okay to keep allowing them to work while on the clock? How do I address the employee’s complaint?

The Legal Side: On the surface, this arrangement might feel harmless – your employee is getting their work done, they’re not distracting anyone, and it’s during slow periods. But once another employee, even anonymously, raises a concern, you’ve got to consider how the optics of this are landing across your team.

Even if everything’s technically above board, allowing one person to work on a side gig while on the clock can look like favoritism, and perception matters. That’s where things can get legally murky. If you’d extend the same leeway to any other employee with a second job, great, make sure that’s documented and consistent. However, if not, and the exception seems arbitrary, that opens the door to potential claims that would be supported by showing that you treated one employee differently from another. And in a pretty major way. Imagine allowing eight employees to run side hustles during work, provided they promise not to let it interfere.

At this point, the complaint is anonymous, and on its face, what you are allowing is not illegal. While we feel it’s essential to allow for anonymous complaints about things like threats and discrimination, we recommend that you be cautious about acting on a complaint that cannot be verified.

The Human Side: When an employee doesn’t feel safe or comfortable voicing a concern directly, they often opt for anonymity. That’s a sign something’s not sitting right, and it’s worth paying attention to.

It may be true that your current arrangement hasn’t caused any immediate harm, we aren’t so sure that is the case, but these things can build up. One employee doing personal work on the clock might feel like a harmless exception to you, but to others, it might look like a privilege they wouldn’t be offered. And resentment can grow quietly in the corners, especially if folks think leadership is turning a blind eye.

You don’t necessarily have to rescind your permission overnight, but it’s worth revisiting your boundaries around work time and personal time. If we were Dear Abby, we’d say, “I think it might be time to have your employee separate her side gig from work and to tell her you need to wind it down during operating hours.” It isn’t fair to the others, and at some point, you are going to hear, “Yes, but what about Mary spending all that time on her other job at work, and you let her? I just want to run out and grab my kid from school every day. Why is that any different?”

Bonus reading: CEDR’s Wage Compliance Guide