What Is Moonlighting?

In an era marked by an evolving economic landscape, moonlighting has become increasingly common across workplaces as it helps employees combat inflation and the rising cost of living.

In the US alone, the rate at which employees hold multiple jobs has increased to 7.8% from 1996 to 2018, as per the United States Census Bureau.

While this phenomenon helps employees supplement their income, pursue personal interests, and acquire new skills and expertise, it also poses a significant threat to employers through conflict of interest, client poaching, and reduced employee productivity.

But how can employers detect moonlighting activities in their organization, and what strategies can help them prevent their occurrence?

To get the answers to these questions and more, continue reading this blog, where we’ll discuss the intricacies of moonlighting, its several types, its hidden risks, and how organizations can detect and deal with it.

What Is Moonlighting?

Moonlighting is the practice of employees taking up a second job/side gig alongside their primary job to earn extra money, mostly without the knowledge of their full-time employer. Usually, the employees engaged in moonlighting do the second job after completing their regular work hours at the first job.

But why do employees moonlight?

That’s because dual employment helps employees supplement their income, gain skills or experience in another domain, set up their side business, or even pursue their passions.

Did You Know? The term moonlighting was derived from the traditional idea that individuals would work a second job ‘under the moonlight’ after completing their regular job in the daylight.

Types of Moonlighting

Blue Moonlighting

Blue moonlighting is when an employee goes for a second job apart from their regular job but finds it challenging to manage both jobs simultaneously. As a result, they become unproductive in one or both jobs and have a hard time performing well in either. Such a failed attempt at working two jobs in parallel is called blue moonlighting.

Quarter Moonlighting

In quarter moonlighting, the employee does a part-time job apart from the regular full-time job and can manage both jobs without compromising productivity and efficiency on the primary job. Here, the employee may take a secondary job on a part-time basis to work for 3-4 hours.

Half Moonlighting

In half moonlighting, employees devote more than half of their free time to the second job after completing the first job to earn extra money. This type of moonlighting leaves almost no time for personal commitments.

Full Moonlighting

In full moonlighting, employees manage to work on both primary and secondary jobs successfully without compromising on productivity in either job. For instance, employees may take up a side hustle such as online tutoring, bookkeeping, etc. or start a business apart from their regular job.

Is Moonlighting Ethical?

Most countries don’t have any laws as such prohibiting employees from moonlighting. However, many organizations don’t accept this practice and use non-compete agreements or other types of contracts to prevent employees from engaging in dual employment.

In such cases, employees need to sign employment agreements prohibiting them from working a second job. Violating such contracts can lead the employers to take disciplinary action, which could even result in legal repercussions for the employees.

Moonlighting Scenarios in Different Regions

• In the United States and the UK, dual employment is not illegal; however, the government has straightforward policies that employees must disclose the fact to their employers that they’re taking work or projects outside their regular job.
• In India, dual employment is restricted to adult workers, according to the Factories Act (1948), Section 60. However, this law is limited to laborers and factory workers, so it doesn’t apply to other sectors and industries.

  Talking about the other sectors, most companies find moonlighting to be an unethical practice and prohibit employees from engaging in moonlighting by using employment contracts. However, a few companies have come forward to support dual employment in India as long as certain conditions are met. For example, Swiggy, a food delivery platform, has stated that employees can work on side hustles, projects, or gigs during the weekends and outside work hours as long as they get written approval. Also, this dual employment shouldn’t hamper their productivity and performance at the primary work.

• Some countries prohibit employers from restricting employees from taking up another job outside the regular work hours. For example, the European Union adopted a directive in 2019 that ensures an employer can’t prohibit employees from taking up a second job with another employer. Any restrictions on this need to be justified by employers.

In conclusion, most organizations consider moonlighting unethical, especially when the employees work on another job in secret and with direct competitors. This practice has more risks of leaking potential data and confidential information of the primary employer to the secondary one. On top of that, moonlighting can also result in employees using company resources and tools for their second gig.

Thus, if the applicable laws and regulations don’t prevent employers from restricting employees from taking up dual employment, employers can consider creating a contract to restrain employees from engaging in moonlighting. Also, they can inform employees of existing agreements and contracts and spell out all the agreements, violations, rules, and consequences during onboarding.

Reasons Why Employees Moonlight

Earning Extra Income

Most employees go for moonlighting as their primary job may not help them meet their ends. The second job helps them supplement their income, tackle unexpected expenses, and build financial security. For example, a coder can work as a full-time employee for a firm and can work as a trainer to teach coding in an institute after completing regular work hours.

On top of that, due to the increased cost of living and inflation, many employees may find it challenging to meet their expenses and pay off their loans, such as auto or home loans, which may compel them to take up another job to pay off these short-term debts.

Exploring New Opportunities to Grow

Employees may consider changing their job stream or want to take a stab at other job opportunities, for which they can try moonlighting. With this approach, employees can gain foresight into the career options they can switch to down the road.

For instance, a full-time employee may try to acquire skills or gain experience or expertise in a different field using a few freelancing gigs or projects.

Note: In some cases, there’s a chance that employees may not feel appreciated by their company for the hard work they do. Due to this dissatisfaction, they may feel compelled to devote time to another job that acknowledges and respects their work and efforts.

Concerns About Job Insecurity

The slowdown in the labor market, recession, and layoffs can cause employees to fret about job insecurity, leading them to take up another part-time job apart from their current employment. For example, the recent massive layoffs in the tech industry have pushed many employees to take up a secondary job or some freelancing projects in parallel.

Pursuing Personal Interest

Not all moonlighting cases contribute to financial stability; some people may take up another job to pursue their passion. For instance, employees working full time may start their blog in a niche they are interested in.

Setting up Their Own Business

Some employees aspiring to be entrepreneurs can engage in moonlighting to ensure consistent income meanwhile they set up their businesses. This way, they can mitigate the challenges that an entrepreneur faces during the initial setting up of the business, such as low funding, cash flow, etc.

For instance, an employee who has an entrepreneurial spirit but works as a full-time software engineer may set up a business and work for different clients.

How Does Moonlighting Affect Organizations?

Reduced Productivity and Performance

When employees take on two jobs simultaneously, chances are that they may feel exhausted, tired, and even burnt out, which will impact productivity to a great extent. Juggling multiple jobs leads to divided attention and energy, which not only hampers productivity but can also worsen the performance and quality of work and make employees unfocused.

Conflict of Interest

In moonlighting, employees can work for competitors from the same industry while employed for their primary job. This can raise concerns related to potential conflicts of interest and breaches of confidentiality.

Here are the major risks associated with moonlighting for tech firms:

• Confidentiality Breach

When an employee discloses the confidential and sensitive information of the first company to the secondary employer, who can be a direct competitor from the same industry.

• Client Poaching

When employees are somehow engaged in activities that may deter the clients from the primary employer and prompt them to become customers of the second employer.

How to Detect Moonlighting by Employees

Decreased Productivity

When an employee works two jobs simultaneously, it can probably affect their productivity and efficiency.

So, check for signs such as:

• Has an employee’s performance dropped suddenly, especially if they were the high performers?
• Has an employee taken too much time on the tasks they could have done quicker?
• Have they submitted work with more errors lately?

Such scenarios can alert employers and if all other causes for low productivity and efficiency are exhausted, they can look into the aspect of moonlighting.

Increased Absences and Time Off Requests

Suppose you spot a sudden change in an employee’s behavior and habits, such as a surge in time off requests, more unexpected absences, tardiness, etc. Such behavior can be a sign of the employee engaged in moonlighting.

Checking Social Media Activities

At times, social media platforms can help you ascertain the possibility of employees engaged in moonlighting. You can check their employment status posted on social media and professional networking sites or see if they advertise their work activities openly.

Employers are advised not to invade employees’ privacy by tracking their activities on social media handles. But, if the managers are already connected with the employees on such sites and spot suspicious behavior like their public posts about other jobs or businesses, they can flag it to the administration.

Fatigue and Tiredness

Employees working two jobs in parallel are more likely to seem exhausted, burned out, and tired. They may also find it hard to concentrate on their work or may seem less attentive and engaged during meetings. Although there can be other reasons behind exhaustion and tiredness, keeping track of such activities can help you connect the dots.

Monitoring and Reporting

Consider encouraging employees to report any case of moonlighting to the management if they detect it among their colleagues. You can incentivize employees to report such cases if they find any coworker working on projects other than the ones assigned at the workplace.

Note: Employers must ensure that the methods for checking dual employment comply with the region’s applicable laws, regulations, and employment rights.

Background Verification

When a company hires an employee, it’s suggested that a background check be done before the onboarding process. A background check helps organizations ensure that they’re hiring trustworthy candidates with clean records.

Thus, by making background checks a part of the onboarding process, organizations can mitigate the risks of dual employment, theft, and fraud. For instance, with background verification, they can learn if the candidate has an unscrupulous past, engaged in unethical practices, or indulged in dual employment. For this, employers can hire a dedicated agency that does employment background checks using systematic methods.

Social Security Number Verification

Employers can also use the Social Security Number Verification Service (SSNVS) for the background screening process while hiring a new employee. A Social Security number is a nine-digit number issued by the United States government to U.S. citizens & eligible U.S. residents. They use this number to keep track of an individual’s earnings, financial records, employment histories, and the number of years worked. If employers spot any discrepancies vs. what the candidate had shared or spot dual employment in their past records, they can evaluate their candidature accordingly.

Note: Former employers can also help you gain insights into the candidate’s work ethic or involvement in dual employment.

Tips to Prevent Moonlighting by Employees

Open Communication With Employees

Employers must try to communicate openly with employees regarding their job contracts. HR can have a detailed conversation with candidates while onboarding on topics, such as:

• Why the company doesn’t support moonlighting
• How moonlighting will affect the business
• What the consequences will be if they decide to moonlight

Also, if any existing employees are suspected of moonlighting, they can have a one-on-one with them. In the discussion, the HR can ask questions like, are they facing any financial crisis or trying to pursue their passion by doing another part-time job? Or ask them if they can help in some ways to manage the employee’s financial issues by upskilling them and upgrading their positions based on skills.

Such conversations will foster trust in employees and help them understand that you have empathy for them, which could help reduce the probability of moonlighting.

Create Moonlighting Policy

The first and foremost step to prevent moonlighting is to create a policy. But before developing the policy, it’s great to address some of the questions, such as:

• Are employees completely prohibited from working two jobs at the same time?
• Are employees prohibited from taking up side gigs and part-time work as well?
• Are employees prohibited from working in the same industries or even other industries?
• What would be the consequences if an employee is found working two jobs without prior approval?

You can clearly outline the expectations regarding performance, conditions of disclosure, and consequences of violations in the policy. Consider mentioning the policy in the employee handbook for employee reference.

You can mention the following agreements in the employment contract, such as:

• Non-compete

Non-compete agreements are contracts that employees sign before working for the employer. By signing the non-compete agreement, an employee agrees not to work with a competitor for a specific duration of time after their current employment.

• No Performance Hindrance

If working part-time or side hustle is allowed for employees, HR must draft a policy where they can mention the expected outcome from the employee for their jobs.

Competitive Compensation and Appraisal Programs

One of the major reasons behind moonlighting is to get financial stability and afford the expenses. As the cost of living increases, employees tend to get involved in dual employment due to lower salaries. So, ensure that the salaries, performance appraisals, yearly bonuses, and other benefits structures are competitive enough to reduce the chances of moonlighting and retaining existing talents.

Foster Professional Growth in Employees

Conduct certification and training programs to upskill employees in their respective fields to improve their competency and help them sharpen their skills. Encourage employees to take on different projects that can help them gain diverse experience and expertise.

Many employees go for dual employment for career advancement and skill development. Thus, by providing them with the necessary in-house training, they wouldn’t need to work outside their primary job.

Educate Employees Regarding Ethical Practices

Work ethics continue to be the backbone of the organization’s success. Thus, employees must be well-acquainted with ethical work practices and understand their importance.

Consider conducting training programs once in a while to make them aware of the ethical practices at work. These programs will instill a code of conduct and ethical values in employees. It’ll help them understand the significance of loyalty to the company and how honesty, diversity, and compassion are imperative in creating and maintaining an ethical work culture.

By fostering an environment of trust, open communication, and moral behavior, employees can better understand the importance of appropriate employee conduct and will avoid engaging in unethical moonlighting practices.

Use a Time Tracking and Productivity Analysis Tool

Despite taking these measures, if you still aren’t able to avoid moonlighting within your organization, consider using time-tracking software designed to track and improve workplace productivity.

You can consider leveraging Replicon’s time-tracking software, powered by ZeroTime™, that automatically captures work time data of your employees across several applications, such as Jira, Slack, and Zoom, and populates AI-powered timesheets based on the hours spent across different activities. This can help employers detect if the employees are using their time on work activities or otherwise and how productive they are.

With this insight into the work-time data, employers can better assess individual productivity levels, which could allow them to detect moonlighting to a certain extent. Though there can be umpteen reasons behind low productivity trends, moonlighting can also be one. So, pay heed to other signs along with low productivity to detect and prevent employee moonlighting.

Take Necessary Disciplinary Action Whenever Required

Always foster a culture of open communication, empathy, and transparency. This will instill a message in your employees that you trust them and care about their well-being.

However, remind them of the consequences of moonlighting occasionally, especially if you find the behavior of any employee to be suspicious. This reminder will help them recall that there’s no room for such unethical practices. And the employer can take serious actions in case of breach of contract.

Note: Remember that if an employee hasn’t signed a contract that restrains them from moonlighting or dual employment, the employer is not entitled to take such disciplinary actions.

Here are a few disciplinary actions you can consider for moonlighting employees:

• Issuing warning letters
• Suspending employees for a stipulated period
• Putting them on PIP (Performance Improvement Plan)
• Termination in case of serious harm, such as leaking confidential information to the competitor

Bottom Line

Moonlighting has emerged as a lucrative option for employees to build financial security, supplement their monthly income, and combat the rising cost of living. However, it raises legitimate concerns for employers, including conflict of interest, decreased employee productivity, and risk of client poaching.

Most countries have no stringent laws prohibiting employees from being involved in multiple jobs in parallel. However, employers can ask the HR department to draft a policy in the employment contract that helps them mitigate this risk. Before creating the policy, organizations must check for relevant laws and regulations applicable in the respective region to prevent legal issues.

Regardless of whether the employee is involved in moonlighting or not, employers must have appropriate programs in place to help employees attain professional growth in their careers and acquire more skills in their streams. Such practices can significantly reduce the occurrence of dual employment and foster a culture of trust and collaboration.