Conflict of interest is when an employee has both loyalty to his company and also loyalty to friend/family/lover at the same time while in the workplace. The workplace does not allow preferential treatment, and if your wife is your employee then your loyalties would be towards your job and your wife, and conflicts would arrive in situations such as giving raises, awarding new positions, giving reprimands, or firing for lousy performance. A husband isn't going to fire his wife, right? So to stop them from getting/giving such preferential treatments, it simply isn't allowed. They call it a conflict of interest.

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