Moonlighting employees: What it is & 5 ways to prevent it

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Moonlighting indicates an employee taking up an additional job (part-time or full-time) along with a regular job. This has been a growing trend, especially in the health, education, and tech industry in recent years. 

It can be something as simple as a teacher offering tuition services after school work hours or a software engineer moonlighting as a telemarketer at night.

So, is moonlighting bad for businesses?

How do you prevent it?

In this article, we’ll shine some light on moonlighting and its various types. We’ll also explore the six reasons employees moonlight and five ways to manage it. 

Let’s dive in!

What is a moonlighting employee?

Moonlighting is when an employee takes up a side hustle or a second job while being on the payroll of a primary employer — usually without their knowledge. 

Generally, the primary job is a full time position, while the moonlighting one may be part-time.

For example, your employee may work a 9-to-5 shift for you and pick up a secondary job for two hours to earn extra income. They may even use your company time and resources without your knowledge to work the second job. 

While “moonlighting” has been heard of for years, the trend has now surged. This could be because of the prevalence of remote working arrangements without appropriate policies or productivity monitoring systems.

Now let’s check out the four kinds of moonlighting.

4 key types of employee moonlighting

Here are four ways in which employees can moonlight:

1. Blue moonlighting

Some employees may find it challenging to balance a second job (part-time or full-time) with their regular job. 

They may be unproductive and unable to do their best in either job. This failed attempt at dual employment is called blue moonlighting.

2. Quarter moonlighting

When an employee works a part-time job after their regular work hours, it’s called quarter moonlighting. Here employees may work for 2-4 hours after their primary job.

3. Half moonlighting

Half moonlighting is when an employee spends nearly 50% of their free time after their regular job in a part-time or second job to earn extra money.

4. Full moonlighting

This is when an employee successfully manages two jobs at the same time. For example, some employees kick-start side hustles or startups while working a full-time job.

Now that we know what moonlighting is, let’s find out why employees moonlight.

5 common reasons why employees moonlight

Here are five reasons why employees may take up second jobs. 

1. Earning extra income

Most employees moonlight when their primary employer doesn’t pay them enough to cover their daily expenses. They take up part-time jobs or freelancing gigs to earn extra income. 

For example, your computer engineer may offer coding lessons to school and college students or run startups to earn a little extra money.

Additionally, many financial advisors also suggest having multiple sources of additional income for financial security. While they may not necessarily mean working two jobs, they may tempt employees to start side hustles, startups, or take up secondary jobs. 

2. Worrying about being out of a job

Economic and job market instabilities may make some employees worry about termination or job security. In such cases, employees take up outside employment in case they lose their primary job.

Massive layoffs and pay cuts in the tech industry, for example, have driven employees to take up a secondary job to secure their income.

3. Paying-off debts

The recent pandemic has increased inflation and living costs. As a result, many employees struggle to meet their daily expenses and pay off their debts, such as car and education loans. 

They may take up outside employment to pay off their debts if their full-time job isn’t enough to cover such expenses.

4. Planning a change of career

Employees who plan to change their careers may take up a second job to test it out. Some employees may also take up freelancing gigs to gain experience in their interested fields if they don’t have the required expertise. 

For example, an engineer interested in becoming a copywriter may freelance to hone their writing skills and get good exposure before going full-time. 

5. Following their passion

Employee moonlighting can also be about following their passion. 

In some cases, pursuing a passion may not be financially rewarding. That’s when employees might try pursuing it as a secondary employment. 

For example, an individual who works a day job as an architect may be a DJ during their free time. 

Although moonlighting may benefit some employees, it could impact their employer adversely. Let’s check out how moonlighting affects businesses. 

How do moonlighting employees affect your workplace?

Moonlighting and overworking can go hand-in-hand as employees have to handle multiple jobs and responsibilities. As a result, employees could face chronic stress, poor work-life balance, and health risks that can affect the company’s overall productivity and bottom line.

Here are some more drawbacks of employee moonlighting:

• Reduced productivity: Working multiple jobs means your staff member may suffer from physical and mental fatigue due to long work hours. This can lead to a short attention span, weak memory, and distraction in both workplaces, ultimately affecting work performance, engagement, and productivity. 

• Conflict of interest: Employees may take up jobs from rival companies or competitors, creating a conflict of interest in your workplace. They may also help develop competitive products or services for the other company, which may have a financial impact on your business.

• Confidentiality breach: Moonlighting increases the chances of a confidentiality breach of product prototypes, trade secrets, and critical data. This may happen when employees take up similar jobs at two different companies. 

• Misuse of company resources: Employees may use company-provided software and laptops for their second job. Some employees may also use their regular job’s working hours for their second job.

So, moonlighting can negatively impact your business. 

But is it illegal? 

There’s no specific law against moonlighting. Rather it depends on the individual company policy. 

For example:

• IT sector companies like Wipro, Tata Consulting Services, and IBM India don’t permit moonlighting.

• However, companies like Swiggy and Tech Mahindra allow their employees to work second jobs if they get prior approval and it doesn’t interfere with their regular job.

This means that if your company’s employment contract or employee handbook specifically prohibits moonlighting, then you can take steps to address it.

Let’s explore the different ways in which you can address moonlighting. 

5 efficient ways to manage employee moonlighting

You can manage employee moonlighting to an extent by actively increasing job satisfaction, boosting employee engagement, and providing better benefits.

Here’s a detailed look at how to manage employee moonlighting in your company:

1. Have open communication with your employees

A positive approach to moonlighting is to appoint an HR expert and have open communication channels with your employees. You can ask them their reasons for moonlighting and help them with it if you can. 

Some employees, for example, may need additional income or want to take up their passion, like writing or painting, as a means of secondary employment.

You can try and accommodate their needs by giving your employees a flexible schedule where they can balance both their profession and passion. Additionally, talk to your employees about how moonlighting will affect your business. 

2. Create a moonlighting policy

There are no specific laws to prevent employees from moonlighting. But you can have your human resources department or an HR expert draft a proper company policy for your employees to follow. If your employees violate these policies, you can take the required action.

For this, you could add one of these to the employment contract: 

• Non-compete: Where employees agree not to compete with the employer during and for a specific time after the employment period.

• Moonlighting policy: This would set out an expectation that employees should treat their work at your business as their primary job and shouldn’t let other jobs interfere with their performance. It’s typically drafted by a human resource employee after seeking adequate legal advice.

Here are a few matters to address while creating a moonlighting policy:

• Are employees prohibited from working in other industries or unrelated fields after working hours?
• Do employees need to notify their managers before taking on an additional job?
• What will happen if a staff member takes a second job without prior approval?
• How will this affect the employee’s right to the benefits you provide?

Before you amend your employment contract or employee handbook, ensure you check your state’s employment laws. 

For example, some states like California prevent you from firing employees if they moonlight when off duty. 

In some cases, the employment laws may allow you to take action if your employee:

• Moonlights during work hours.
• Shares confidential information even after working hours.
• Creates a conflict of interest even after work hours.

That’s why it’s a good idea to seek legal advice when you draft your moonlighting policies. 

3. Take disciplinary action if necessary

If your employees’ second job affects their performance or creates a conflict of interest, you can take disciplinary action as an employer. For example, companies like Wipro, Infosys, and BBC have recently sought to terminate their moonlighting employees. 

Here are a few disciplinary actions you can follow:

• Issue warning letters.
• Suspend poor-performing moonlighting employees.
• Send termination letters for serious violations of company moonlighting policy and issues like sharing confidential information (or proprietary information).

4. Provide regular increments

As the cost of living increases, many employees adopt dual employment due to low salaries and employee benefits. Low wages may also make your employees feel undervalued and exploited.

Here are some ways to motivate your employees to stay with you:

• Increase their salaries.
• Start peer recognition programs to create a positive work environment.
• Offer a performance appraisal.
• Provide yearly bonuses.
• Run reward programs like monthly giveaways.

Following these measures may increase employee satisfaction, reducing the need for a second job. 

5. Use productivity tools to track employee time

Finally, if you’re still concerned that some of your employees are moonlighting when you have explicitly made it against your work policy, you can solve this problem by investing in a powerful productivity tool like Time Doctor. 

Time Doctor

Time Doctor is a powerful employee productivity management and time tracking tool preferred by large organizations like Ericsson as well as small businesses like Thrive Market.

It’s a user-friendly solution with incredible features like reporting and project management, making it the ultimate tool to help you protect your business from moonlighting. 

Time Doctor lets you:

• Track time manually and automatically to check if employees are working on your company assignments.
• Track idle minutes to monitor unproductive time.
• Categorize the website and apps used by employees based on productivity ratings.
• Monitor computer usage during work hours through the screencast feature to ensure employees don’t use company property like laptops for other work.
• Create productive work schedules effortlessly.
• Prevent employee burnout with the work-life widget.
• Generate comprehensive reports to analyze employee work performance.
• Automate employee payroll effortlessly at any time.
• Integrate with popular tools like Jira, Asana, etc.
• Protect your employees’ data with strict security and privacy policies.

Explore more of Time Doctor’s brilliant features.

Not convinced yet?

Here’s what Time Doctor’s users say:

• Gerard O’Donovan (Weymouth, UK): “I was using Rescue time for a year, but it seems that people were still able to hide whilst using it. I tried Time Doctor with some of my team members. There is one lady who I suspected was perhaps working for someone else on the side, and then after using Time Doctor for 2 days and only working 2 hours per day with us, my suspicions were confirmed, she came to me and said, I’m sorry I have another job, and we parted ways amicably.
  
  I find it to be the most useful time management system I have ever come across and it has most certainly helped every one of us to achieve far more than we ever could have without it.”

• Nils Rognerud (San Francisco, CA): “I like Time Doctor very much, and use it to monitor the effectiveness of my staff, who are working from home.”

You can experience these benefits first-hand and increase your teams’ productivity by 22%.

How? 

Request a Time Doctor demo to get answers to all your questions.

Final thoughts

Moonlighting can result in overworked, distracted, and unproductive employees, preventing them from putting their best foot forward in either workplace. 

To prevent moonlighting, you can boost job satisfaction, increase employee engagement, and set employee expectations via a moonlighting policy. You can also use Time Doctor, a powerful productivity tool, to spot overworked or moonlighting employees.

Try out the free Time Doctor demo to find out how it can help your business!