What is Moonlighting: A Guide to Managing Employees

by Chandler Barr Feb 3,2023
with Chandler Barr, CEO

The number of remote employees is growing these days, posing a threat to IT companies, especially after the pandemic. This has given rise to employee moonlighting. The work-from-home concept helps employees practice more of moonlighting. It is a popular practice of working for one organization while taking extra job responsibility without the employer’s knowledge, and both are performed simultaneously, which is termed as moonlighting. 

What is Moonlighting?

Moonlighting Meaning, as defined by USLegal, refers to the practice of working more than one job simultaneously. It involves holding a second job outside of one’s regular working hours. For instance, someone with a regular 9-to-5 job who engages in a night job to supplement their earnings is moonlighting.

Based on a survey by Kotak Institutional Equities, 65% of employees are into moonlighting or looking for part-time job options while having a full-time job. Experts often believe that moonlighting should be accepted as long as employees deliver productivity and have a high commitment to the signed-up work. 

As long as the purpose of moonlighting is positive and can set hourly work, an employee shouldn’t be restricted from practicing the trend. 

Reports show this ongoing work trend sparkling among the remote working mode. IT giants like Wipro terminated 300 workers as its competitors employed them, which fueled the situation. This is how it poses a challenge to the IT sector. As people get the option of working from home, they have free time and a chance to make the best use of it and earn money. 


Delving Deeper into the Concept of Moonlighting

Moonlighting is a source of extra income besides main employment. An employee hired for a company works for another organization, working on the same project. The moonlighting employees can do app development, content writing, run a campaign, and others based on employee skills and knowledge. Moonlighting employees are free to pursue the additional task on their own, provided it doesn’t interfere with their regular schedule and offers some additional benefits. 

The moonlighters may face time constraints and often feel detached from their official company. This happens when folks spend only half of their efficiency on their company work and try to focus simultaneously on the extra work. It can often lead to less productivity and dedication. Juggling and balancing the two becomes tricky here.

Also Read: The Essential Guide to Employee Productivity in a Hybrid Setup

Moonlighting in IT 

Moonlighting in IT

The ongoing practice of moonlighting has posed a threat to IT giants, making them come up with steps to deal with it. Reports show that 64% feel that moonlighting is ethical and has nothing to do with the loyalty of an employee. Furthermore, recent surveys show how moonlighting changes the mode of remote jobs    

Recently, Infosys warned employees about moonlighting, saying it can lead to termination. The new company assures that employees shouldn’t engage in moonlighting outside their employment, duly signed by the staff. An otherwise situation will lead to a violation of the employee’s code of conduct. Besides, the staff confirmed to put in their effort during their tenure for their present employer only. 

Also Read: 10 Best Employee Retention Strategies to Keep Your Best Talent

IBM clearly states that double employment isn’t ethically correct, and the company won’t tolerate such practices from employees. 

But, COO of TCS, N Ganapathy Subramaniam, is of the view that if employees meet productivity and efficiency and aren’t into any illegal activities violating the company values and ethics, they don’t have any problem if an employee is willing to make extra bucks.

Moonlighting Is Rising – Lets Find Out How and Why

Moonlighting is here to stay as employees are operating more from home than from the office. It helps enhance earnings; thus, the trend is becoming a new normal. 

Reasons for moonlighting

Need for a backup plan

Having a plan B is one of the primary reasons to practice moonlighting. It grows from job insecurity and works as a backup. As an aftermath of the pandemic, unemployment has become a common concern; people are in search of additional income.  

No need to hold on to steady jobs

People have realized that work is more than just 9 to 5 jobs. An individual has to work depending on a professional, and projects can be high paying and other. So, working per need and including some extra work and pay can be beneficial. 

Chance of change in career 

Job switching may not be that easy at times, and moonlighting is a good option to try a second job while continuing with a regular job. Therefore, moonlighting gives a chance to gather experience in a skill that later yields lucrative employment. 

Ethical moonlighting 

Ethical moonlighting is a situation in organizations that creates multiple job opportunities and encourages them to try it. But organizations must safeguard their company interests with written policies that clearly define the required criteria. Here, companies should prepare for the following:

  • Intellectual property 
  • Financial interest 
  • Competitive advantage 
  • Resources like software and laptops        

How to Deal with Moonlighting Employees?

Is firing the right move to deal with moonlighting employees? Though every employee needs to abide by employment contracts, the option of firing the employee is too early to decide. Let us shed some light on ways to deal with it. 

  • Share the Consequences with Employees

If employees know that they are doing something wrong or employers don’t know of employees’ moonlighting practice, employers should convey that they trust the team. Try to share that the company is concerned about employees’ well-being and value trust. Besides, remind them of the consequences of moonlighting without knowledge of the company, and authorities can take serious action against them as required. 

Before such a situation arises, communicate with employees openly and honestly. Also, share that other companies may not offer benefits, including vacation, healthcare, and other amenities. By this, the employees recognize that the company is highly concerned about work culture and will discourage moonlighting practices against company policies. 

Also Read: Qualities of a Good Manager: 10 Skills You Need

  • Have a Non-Compete Agreement 

A non-compete agreement is essential to have before hiring a candidate. These can protect the company’s intellectual property, reduce competition, and prevent workers from engaging with other projects or work for competitors. This agreement should mention a prohibition when looking for employment elsewhere while employed in a company. If employees are found to be working on two company projects, strict actions will be taken for disclosing any confidential data or even more.  

Employers can use the agreement against employees engaged in moonlighting. In addition, the contract can limit an employee’s ability to work for another company outside its official work. This is how the company can minimize risk and avoid unethical workplace policies.

Employee handbook

  • Employees Should Understand Company Moonlighting Policy 

Employees should be aware of the policy and limits set by the company. To make sure that every employee is aware of it, mention the brief in the company’s overview section with other policies. Besides, mention how the company will handle employee moonlighting cases per the policy. 

Industry experts suggest IT giants take a look on their active policies and develop an approach to deal with moonlighting. They can do this by setting performance expectations, protecting confidential company details, and others.  

  • Use Employee Engagement Software 

The employee engagement software can track an employee’s performance, productivity, and engagement levels. It helps managers track the work activity of employees and identify any signs of moonlighting. 

Employers can get information on whether some employee works for another company or passing on sensitive information outside of working hours.   

  • Ask Questions Regarding Moonlighting 

If you already know what your employees are doing or what to find out, ask them directly about it:

  • Are you into some new projects outside our team?
  • Are you engaged in other work outside normal office hours?
  • Can we help you balance work here? 

Ask them questions and make them comfortable so that they feel free to discuss why they are into moonlighting. The more they are comfortable expressing actual reasons for moonlighting, the better you know what makes them happy. Based on this, you can take actions to alleviate their concern that their full-time job will be sufficient financially. 

Side hustle

Final Thoughts 

While an employer needs to respect employees’ need to engage with more than one jobs, there are situations in which moonlighting can have negative effects on the company.

Beyond company policies, HR should ensure that employees are aware of their limitations outside their employment in the office. So, when it comes to addressing moonlighting workers, focus on what is legitimate and the employment-relating concerns. If a company is experiencing moonlighting problems and doesn’t know how to deal with it, it should frame a legal structure, defining norms and rules before things go out of control.

Frequently Asked Questions

Q1. What is moonlighting?

Ans. Moonlighting refers to the practice of working more than one job at the same time, typically involving a second job outside of one’s regular working hours. It allows individuals to supplement their primary income and earn extra money.

Q2. Is moonlighting legal?

Ans. The legality of moonlighting depends on various factors, including employment contracts, company policies, and local labor laws. Some employers may prohibit moonlighting due to potential conflicts of interest or concerns about employee productivity. It’s essential for employees to review their employment agreements and seek clarity from their employers to ensure compliance with any restrictions.

Q3. How should employers address moonlighting concerns?

Ans. Addressing moonlighting concerns requires open communication and clear company policies. If prohibiting moonlighting, employers should explain reasons while considering individual circumstances. Promoting work-life balance and addressing productivity concerns are essential for effective management of moonlighting employees.

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VP of Sales
Chandler Barr

Chandler Barr is the VP of Sales at Engagedly and is focused on driving a culture of progress over perfection in a no-fault environment where employees are secure and encouraged to think creatively to solve problems. Chandler is a seasoned leader that has scaled sales teams for SaaS startups and multibillion-dollar publicly traded tech companies, as well as, led Marines to accomplish the mission during hardships overseas.

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