What is Moonlighting? Meaning, Causes, & How to Prevent

I understand, as an employer, it must be frustrating for you to find out your employee takes on your full-time job while working elsewhere. It is known as moonlighting.

The worry of productivity loss, loyalty, and potential conflict of interest due to moonlighting can really be daunting.

I know this from my experience as I’ve balanced this side hustle for about a decade. Hence, I’ll guide you through every nook and corner of this shadowy issue.

In this article:

• What is moonlighting in a job
• Why do employees even choose moonlighting?
• Is moonlighting legal or illegal?
• How does it affect the business or organization?
• Probable benefits or opportunities of moonlighting
• Should Employers Worry or Adapt it?

There is more to this. You’ll learn every nitty-gritty of moonlighting and how you should come around that.

What is Moonlighting?

In simple words, moonlighting is a situation where employees work more than one job or role co-currently to meet their financial obligations.

Typically, moonlighting employees have one full-time work as a main job, and on the side, a part-time job. For example, part-time, freelance, or gig work.

Actually, it can be described in any situation in which your employee works for multiple employers simultaneously.

Where the moonlighting work helps the employees to have extra income, I’ve seen how it can also raise concerns for employers.

Why Do Employees Moonlight?

I know sometimes it can be so confusing, why do employees moonlight? Why do they even take a side hustle while working full-time?

Let me be honest here so that you can weigh the pros and cons of moonlighting.

• Some employees may be struggling with what they can bring to the table professionally or want to improve more.

So, they need an extra source of revenue. Perhaps it is the most straightforward reason behind moonlighting.

• In some cases, it’s just that they are unhappy with their situation.

They want to expand their knowledge and experience through extra-income jobs.

• Probably they are not appreciated in the company and want to find solace by contributing elsewhere.
• Some employees are worried about their termination and job security.

Due to recent layoffs and pay cuts, many employees are turning to moonlighting.

• I’ve also seen some employees are so passionate about something they love doing, even if it doesn't bring in much money. So they continue to pursue it alongside their main job.

Is Employee Moonlighting Legal or Illegal?

Employee moonlighting, in and of itself, is not legally prohibited inherently. It is not illegal unless they have signed or agreed to a non-compete agreement or an exclusivity contract.

Only these contracts may specifically prohibit them from engaging in secondary employment.

In simple words, moonlighting legality largely depends on whether there are contractual obligations and workplace policies on moonlighting that restrict such activities.

If your employees have agreed to such contracts, and still ignore those terms, there will be legal consequences of moonlighting.

As for moonlighting laws, in many countries, it's not illegal and some countries may have different practices.

Let me highlight moonlighting scenarios in different regions.

In the United States, it’s legal to have more than one job. Their employees are just required to inform their employers about it.

In India, as stated in the Factories Act (1948), Section 60, Factories Act (1948), Section 60, dual employment for adult workers in factories is restricted. However, this rule only applies to factory workers and laborers, not any other sectors.

European Union, in 2019, introduced a rule, preventing employers from banning employees from working a second job with a different employer.

Many companies also see it as an unethical practice. That is especially true when they do it secretly work for competitors.

Moonlighting also poses the risk of data leaks and misuse of company resources.

So, if the applicable laws and restrictions don’t prevent you, you can consider creating a contract to restrain employees from moonlighting involvement.

How Does Moonlighting Affect Organizations?

As you see, moonlighting has become increasingly common. But it brings more than a number of challenges to the organization.

You, as an employer need to understand these challenges to manage moonlighting and at the same time maintain a healthy work environment.

Decreased Productivity

The very first impact moonlighting has on job performance is decreased productivity.

Employees who are engaged in multiple jobs naturally get physically and mentally tired from the extended hours of work.

It can cause work efficiency issues and impair engagement and productivity in both jobs.

They may end up with short attention spans, frequent distractions, and reduced focus due to moonlighting.

Conflict of Interest

When employees accept positions or take on jobs with competitors, your business can be seriously threatened.

They may unknowingly or knowingly help develop products or services that directly compete with your business.

So, of course, it will not only put your business at risk but also can impact your financial performance.

This moonlighting of employees can lead to financial setbacks for your business you may never expect.

Breach Of Confidentiality

It is one of the crucial risks of moonlighting in the workplace- data security concerns.

Moonlighting can breach trade secrets, product prototypes, or employee non-disclosure violations.

It can result in a major breach of confidentiality, trust, and security for your organization.

Exploitation of Business Resources

Due to moonlighting, some employees end up with employer resource misuse using company assets for side jobs.

Moreover, nowadays more people working remotely or in hybrid settings post-COVID. So, Some even sneak in secondary tasks during work hours.

Apart from affecting productivity, it creates a risk of compromising company tools and systems for personal gain.

Moonlighting for Employees: Benefits and Opportunities

Honestly speaking, if not outright encouraged, moonlighting sometimes works great to enhance performance and productivity. And, on top of that, retain top talent!

I know it's hard to swallow and I don't recommend it either. But for the record, I am just mentioning if there is any distant benefit anybody can get from it.

Through moonlighting, employees can acquire or improve new skills. It enhances their knowledge and makes them more effective in their duties.

Moreover, it increases employee satisfaction and helps the business remain competitive.

How?

Moonlighting offers new ideas, increases productivity, and keeps employees motivated. Plus, they can earn extra income. Obviously, in this way, moonlighting does not hurt organizations or businesses.

That’s not it!

Moonlighting can also help expand a professional network. Employees who moonlight may build connections or networks working in a variety of industries and with different companies.

It can benefit you or your business by offering access to new clients, talent, and opportunities.

The Rise of Moonlighting: Should Employers Worry or Adapt?

Feeling like a two-edged sword, right? But with proper understanding, it doesn’t have to be.

As an employer, it’s natural to have fear of employee moonlighting trends as it can lead to enough worrisome consequences. But with the right strategy and contract in place, it doesn’t have to be an issue.

Moonlighting can be acceptable as long as your employees are not working for your competitors, affecting their work performance, or sharing sensitive information.

I always say that a proficient employee is an asset to a business. In case, they are enhancing their skills, and on top of that contributing to your business success, employer adaptation to side hustles shouldn’t be a concern, right?

But if you worry about productivity, data security, or conflict or interests, impact business integrity you should not think twice about taking essential actions.

You can learn about many news stories and how companies are taking big steps to deal with the moonlighter.

For instance, US-based IT giant IBM has made it clear that moonlighting is unethical. It doesn’t allow its employees to take on second jobs.

How to Detect Moonlighting

Now here comes the main concern: how can you tell if moonlighting is benefiting the business or not? Here is a general overview.

Decreased Productivity

First comes productivity monitoring. If there is a noticeable drop in employee performance, especially for top-performing employees, it can be a red indicator.

For example, they miss deadlines, participate less in team projects, or the quality of their work decreases.

Sometimes, it is taking longer to complete their routine tasks.

But they used to handle it quickly. When this happens frequently, the possibility can be that they may be juggling different roles.

Change in Routine

You should also notice whether there is a sudden change in their work routine.

As I have seen, moonlighting employees are more likely to request unexpected time off, arrive late to work, or leave early.

They show frequent absences and even tend to reschedule meetings regularly. These can be possible signs of outside commitments.

Social Media Checks

Social media checks can also be a good way to know whether your employees are moonlighting.

If you see their posts are not related to your business, it can mean that they are doing another job.

Ethically, if you have to do so, you should check their public posts like LinkedIn updates or work-related posts during office hours.

Fatigue and Distraction

No wonder when one employee handles more than one job, it must be tiring. Moonlighting employees regularly look tired. They typically can’t concentrate on their work.

You can see signs of falling asleep during work and making careless mistakes. They may be overworked.

Moreover, frequently checking their mobiles or other devices during work hours can also be a sign of moonlighting.

What Comes Next: How to Deal With Moonlighting Employees?

The time is to diminish the moonlighting tendency among employees. So, from where do you start?

The effective involvement of HR can effectively sort out the facts faster than you have ever thought of.

Let's bring light into HR policies for secondary jobs and how to balance employer-employee expectations:

1. Open Communication With Employees

To manage the moonlighting among employees, nothing can beat how well you are treating them.

As Sir Richard Branson says, when your employees feel valued, they will be less likely to seek other work, and that is often hindered by poor communication.

You should demonstrate well-proven communication channels with your employees through which you will talk with them.

You need to be clear with them about the company policies along with understanding their career paths and performance expectations.

2. Create A Moonlighting Policy

Once you establish clear communication, you can set some moonlighting policies that your employees need to follow.

The HR department can play a role in drafting such policies here. So, the question is: What should be included in the policy?

• Clearly define what moonlighting means in your organization.
• Highlight where they need to seek approval before heading to a secondary job.
• The moonlighting should not hamper the productivity of the company's employees.
• Add what happens if any employees violate the moonlighting policy.
• Examples of secondary jobs that are acceptable and those that are not.
• Specify working hours for secondary employment, and they must not overlap the company’s responsibilities.

3. Don’t Think Twice About Taking Disciplinary Actions When It’s A Must!

Not just demonstrating policies is enough until you are consistently implementing them.

When your employees violate the rules or fail to follow protocols for the company, you need to take appropriate disciplinary action right away to maintain fairness.

Some of the legal actions against employee moonlighting could be:

• A warning where the employee can get a chance to correct their behavior.
• If violations continue, consider suspensions, demotions, or even in severe cases, termination.
• Develop a performance improvement plan (PIP) to correct their underperformance.
• Temporary loss of privileges or benefits such as bonuses and promotions until the issue gets resolved.

4. Track Employee Time and Performance Using Effective Productivity Tools

Studies reveal that tracking employee performance can increase the employee's productivity by up to 10-20% on average.

With performance analysis, you can even manage moonlighting employees effectively.

For instance, various time-tracking software can be used. It helps ensure employees dedicate their required hours to the company, and you can define declining work quality or efficiency.

Final Words

All in all, as an employer, you need to handle employee moonlighting carefully. You should set clear guidelines and communicate well with your employees what’s allowed instead of directly banning it outright.

Moreover, as long as employee moonlighting does not affect your business, you can find ways to make it useful for your business.

One thing to keep in mind is that when employees feel valued and respected, they are more likely to stay productive and focused in the workplace.

Frequently Asked Questions about Moonlighting

Can employers completely ban moonlighting?

To be frank, it varies from company to company. You, as an employer, can prohibit side jobs if you think they pose a risk of conflict or violate company rules through moonlighting. It will ensure employees' full commitment and prevent issues related to employer control over side jobs.

What are the legal consequences of moonlighting?

The employment laws for moonlighting differ by region. Some businesses don’t mind it, while others are concerned. However, employees can expect job termination for moonlighting if it breaches company contracts. So, you need to learn about employee rights and legal issues to avoid conflict.

What is unethical about moonlighting?

Moonlighting will be considered unethical if employees do it secretly or if it conflicts with their obligations to their primary employer. It can lead to conflicts of interest and legal liability.

Can I get fired for moonlighting?

As for employees, job security concerns can arise if their moonlighting violates company policies. Many businesses or organizations have rules regarding moonlighting. They set these rules to ensure employees remain focused and don’t affect company interests.