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The LLC I work at, where I am in a managerial position with accountability and access to company finance, recently hired a new salaried employee. The majority owner in the LLC also owns another business and is having that salaried employee do work for their other business with no exchange of funds.

I am frustrated because this employee's time is being used for another company to which they were not hired and it is causing delays in their deliverables... are there any repercussions for this behavior, legal or otherwise that have the potential to impact the financial efficacy or liability of the company?

(edited to address comments)

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    Are you this employee's manager? How do you know they are not being paid for their work? How are you in a position to know their business relationship with the owner?
    – Donald
    May 1 at 16:25
  • This sort of "is it legal" question is likely off-topic here. If you really want to know "how can I approach the owner/ my boss about preventing these delays", that would be on topic. Legally, it is possible that the owner is failing in his fiduciary duty to the minority stockholder(s) of the company that is paying this employee if they are paying for 40 hours of work that are being diverted to a different company. But that will depend on a whole lot of facts that "aren't in evidence" at the moment.
    – Justin Cave
    May 1 at 16:41
  • I've worked for a small company (+/- 15 persons) and we had a clause in our contract that stated we could also work for another agency/company that would be linked/owned by the same owner. The legal and financial issues are of the owner, not yours. But you may check their contracts?
    – OldPadawan
    May 1 at 17:18
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    If you are not the manager of this employee and a delay of their deliverables is directly affecting you or your group's ability to do work, I would reach out to their manager.
    – sf02
    May 1 at 17:25
  • Depending on where this is located... It could be illegal. In some countries when you lay off employees you are required by law to offer them their old job back... So some people try to skirt around this by creating another company then hiring people to the new company to work for the old company.
    – Questor
    May 2 at 21:25

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I am frustrated because this employee's time is being used for another company to which they were not hired

That's really none of your concern. Other people's work arrangement are none of your business unless that sort of thing is part of your official responsibilities

and it is causing delays in their deliverables...

If the delay affects your own work handle it the same way you would with any other person: Log the delays and their effect, ask the employee to meet their commitments & deadlines and if that doesn't work, elevate through your own management chain.

are there any repercussions for this behavior, legal or otherwise that have the potential to impact the financial efficacy or liability of the company?

Impossible to answer without have the exact location. This type of thing isn't particularly unusual and , within limits, perfectly legal in many legislations. If your LLC has a minority owner, they may take exception to this arrangement, but again that's not your concern unless you are an actual owner of this LLC.

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