LSC is issuing this Program Letter to provide guidance to grantees about risks associated with employees’ outside employment. In 2017, LSC’s Office of Inspector General issued Fraud Alert 17-02 identifying instances in which grantee employees’ outside employment had led to fraud and theft, including:

• Use of grantee supplies for outside employment;
• Doing work for outside employers on grantee time;
• Use of grantee travel for outside employment purposes; and
• Improperly directing legal aid applicants to the staff member’s fee-based legal services.

An outside employment policy can help prevent these kinds of abuses. While grantees are not required to adopt such a policy, the following guidance is intended to assist grantees wishing to do so.

An outside employment policy can be included as part of existing ethics or conflicts of interest policies or adopted as a stand-alone policy. It should be drafted with an eye toward consistency with a grantee’s policy governing outside employment by full-time attorneys as required by 45 C.F.R. Part 1604. The guidance provided here focuses on requirements supplemental to the requirements of Part 1604.

Coverage

Who Should Be Covered?

An effective outside employment policy should apply to attorneys and non-attorneys. Key aspects of an outside employment policy, such as a prohibition of the use of grantee resources for outside work or doing outside work during grantee work hours, should be applicable to both full-time and part-time staff.

What Type of Outside Work Should Be Covered?

An outside employment policy should apply to any outside employment, including employment by others and self-employment. Generally, it should cover any employment, the income from which employees would be required to report on their tax return.

Disclosure and Prior Approval of Outside Employment

An outside employment policy should require an employee to provide notice to grantee management that the employee has outside employment. The policy should also give the grantee an opportunity to approve the outside employment. Prior approval can take different forms, such as requiring an Executive Director or supervisor to affirmatively approve outside employment or requiring an Executive Director or supervisor to object within a specified period.

Notice of (or an application for approval of) outside employment should provide you with enough information regarding the nature and extent of the outside employment to decide whether it could materially impair your employee’s job performance or increase the risk of fraud, theft, or waste. Such a notice or application should include, at least:

• Outside employer’s name;
• Grantee employee’s position with outside employer;
• Nature of work performed; and
• Number of hours per week and work schedule.

Misuse of Grantee Resources and Time

An outside employment policy should make clear that grantee employees may not:

• perform outside work on the grantee’s time or
• use grantee resources for outside employment.

Such a policy may require periodic certifications from employees that they are aware of, and have complied with, these rules.

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If you have any questions concerning these issues, please contact Lora Rath, Director, Office of Compliance and Enforcement (202-295-1524; rathl@lsc.gov) or Megan Lacchini, Deputy Director for General Compliance, Office of Compliance and Enforcement (202-295-1506; lacchinim@lsc.gov).