Outside Employment: Five Quick Tips

Even in the best of economic times, City employees can have numerous reasons for seeking outside employment. Some may be exploring a career change. Others, who have an entrepreneurial spirit, may be driven to open a business and be their own boss – at least part of the time. Still others may be working to achieve certain personal or family financial goals.

No matter the financial climate, and whatever the reason, City workers need to be aware of rules that govern their outside employment.

To help safeguard the public’s interests by promoting accountability and avoiding possible conflicts, the City’s ethics laws require outside employment to be approved in advance by the employee’s General Manager or appointing authority. In some cases involving outside employment with a “restricted source,” the Ethics Commission’s review and approval is also required. In other limited situations, outside employment may be denied if certain factors established in the law are present.

Below are a few quick tips on some of the responsibilities that City law places on City employees regarding outside employment. If you have any questions about these requirements, or how thy might apply to you, please feel free to contact the City Ethics Commission’s Program Operations staff at (213) 978-1960.

1. Only Do City Work on City Time

While you are being paid to conduct City business, that is exactly and only what you should be doing. Engaging in outside employment while on the City’s clock or while using City resources is a violation of LAMC § 49.5.5 (C), and you can be fined up to $5,000 per occurrence or criminally prosecuted under City or state law. Just don’t do it.

2. Know Your Status

By law, elected City officials may not receive any outside income, including honoraria, during their time in office. Other City officials -- defined as individuals who are required to file a Statement of Economic Interests (“SEIs”) -- are less restricted. City employees who are not required to file financial disclosure statements have even fewer restrictions. These distinctions, as well as the different obligations placed on these different types of City employees, are cited below.

3. Get Approval from Your General Manager or Appointing Authority

All full-time City officials must get written approval from their general manager (or appointing authority for general managers and Public Works Commissioners) prior to receiving any outside income. Even if you are not required to file an SEI, ask your manager about any approvals that may be required by your department or division. State law also severely limits acceptance of any honoraria by City officials, that is, SEI filers (Govt Code § 89502).

A City official is prohibited from receiving honoraria payments from any source of gifts or income that official is required to report on his or her Statement of Economic Interests. Some limited exceptions apply, such as income earned from a bona fide business or profession of the official. When in doubt, ask!

4. Make Sure Your Second Job Doesn’t Conflict with Your City Employment

General managers may deny outside employment requests if that work – or income from that work – presents a conflict with your City job. For example, if your City job involves approving widget purchase orders, moonlighting at the company that sells those widgets to the City is probably not a good idea.

Some of the factors your general manger may use to determine this include:

- whether the income you receive creates the appearance of, or involves the actual use of, your public office, time, facilities, or equipment;
- whether you are in a position to make, participate in making, or influence a governmental decision that could potentially have a material impact on the source of income; and
- whether the services involve time demands that could make the performance of your City duties less efficient.

5. Know Which Entities are Considered “Restricted Sources” to You

You are required to also receive written approval from the Ethics Commission, prior to accepting outside employment, if your proposed employment is with a "restricted source." The definition of a “restricted source,” which can be found at LAMC § 49.5.2, varies depending on whether you are considered a “high-level official” or not. (If you are not required to file a Statement of Economic Interests, this section does not apply to you.)

Restricted sources to high-level officials include: all registered lobbyists and lobbying firms, any person or entity doing or seeking to do business with the City, and any person or entity that has had business pending before that official or the City Council within the past nine months. For other City officials, restricted sources include: lobbyists and lobbying firms who are seeking to influence the decisions of the official’s agency, a person or entity doing or seeking to do business with the official’s agency, and any person or entity that has had business pending before that official within the past nine months.

More specifics on laws referenced above can be found in the City’s Governmental Ethics Ordinance (LAMC § 49.5.1 et seq.), which can be accessed on the Commission’s website at http://ethics.lacity.org/laws.cfm. If you have any questions at all, we encourage you to call us. We’ll be happy to help!

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