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

Moonlighting is becoming more and more common in the workplace as the economy changes and employees struggle to keep up with inflation and rising living costs. The US Census Bureau says between 1996 and 2018 the number of workers in the US who had a second job rose to 7.8% - and that’s a big risk for companies because of conflicts of interest, poaching of customers and decreased productivity - even though it gives workers a way to increase their income, pursue their own interests and keep up with new skills & knowledge. But the question remains: how do employers know if someone is moonlighting on the job, and what can they do to stop it? In this blog, we’ll take a closer look at moonlighting, what causes it, and what employers can do to prevent it.

What is Moonlighting?

Moonlighting is pretty simple - it's when someone's working a second job in addition to their main job.  The term “moonlighting” or working beyond the moon comes from the fact that it usually happens beyond regular business hours.

For example, taking a full-time office job in the day and then driving for a ride-sharing company or writing in my free time at night is an example of something called 'moonlighting'. This is the term used for that extra job you do on the side when you already have a regular one. But some companies have rules about moonlighting, so it's a good idea to be aware of these - especially if there's a potential conflict of interest or the second job starts to impact how well you're doing in your main job. It's worth noting that a Kotak Institutional Equities survey found that a whopping 65% of people in full-time employment are also looking to do some part-time work or moonlighting on the side.

• Experts frequently hold the opinion that moonlighting should be permitted as long as employees are productive and highly dedicated to their assigned tasks. 
• An employee shouldn't be prohibited from following the trend as long as it serves a beneficial function and allows for the establishment of an hourly salary. 
• According to reports, remote working is becoming more and more popular. The problem was made worse by IT giants like Wipro firing 300 employees while their rivals hired them.
• It poses a particular challenge for the IT industry in a pretty interesting way. People now have the chance to work from home, which means they can make the most of their free time and earn some extra cash.

Is It Ethical to Moonlight?

The majority of nations lack regulations that specifically forbid workers from doing two jobs. Despite many businesses prohibiting employees from having two jobs at the same time - with non-compete clauses or other contracts - signing an employment contract that outlaws taking on a second job is a common requirement. When employees break these rules, their boss may slap them with disciplinary action, and if it comes to it, there are even more serious legal repercussions to deal with.

Moonlighting Scenarios in Different Regions

• Dual employment is permitted in the US and the UK, however, the government has clear regulations requiring workers to tell their employers that they are taking on projects or labor outside of their normal jobs.
• In India, Section 60 of the Factories Act (1948) restricts multiple employment to adult workers. However, other sectors and industries are not covered by this regulation because it is restricted to laborers and factory workers.

Regarding the other industries, the majority of businesses view moonlighting as unethical and use employment contracts to forbid workers from doing so. Nonetheless, several businesses have stated that they will allow dual employment in India provided certain requirements are fulfilled. For example, Swiggy has said that with written consent, employees can work on side projects, gigs, or side businesses on weekends and after work. Their performance and productivity at their primary job should not be impacted by this second job.

• Employers can’t stop employees from working outside of regular working hours in some countries. For example, in 2019, the European Union passed a law that says employers can’t restrict workers from working for another company. Employers have to provide a reason for any restrictions on this.

In conclusion, the majority of businesses view moonlighting as unethical, particularly when individuals pursue a second job covertly and with direct rivals. There is a greater chance that the primary employer's data and private information will be leaked to the secondary one as a result of this behavior. Lots of people moonlight because their main job just doesn't cut it, and they have a passion that they want to try and make a buck out of in their free time. Employers might well consider drawing up a contract that specifically forbids employees from moonlighting, but first they have to check to see if it's even allowed - the law & regulations can sometimes get in the way of what you want to do. While you're getting someone set up with their new job, you could also run through all the existing contracts & rules that have to be followed, and make it clear what happens if those rules are broken.

Key Reasons Behind Moonlighting's Rising

With more employees working from home than in the office, moonlighting is here to stay. Because it increases profits, the tendency is starting to become the new standard. 

1. Extra Revenue

This is perhaps the easiest explanation. On top of their main job, lots of people have to take on a second one to make ends meet. Why? Often because they're trying to meet financial goals like paying off debt, saving up for a big purchase ( maybe a house or a car ), or just covering unexpected expenses.

2. Exploring an Interest or Passion

Loads of people moonlight because their main job just doesn't do it for them, and they want to pursue their passion outside of work. For example, if you're someone who codes for a living and your true love is yoga, then you can understand the appeal of grabbing an extra job - it's a great way to turn your dreams into reality.

3. Building a Side Business

Moonlighting is pretty much the business norm when it comes to people testing the waters of entrepreneurship. They keep their full-time job as a safety net while they launch their side hustle - then they can see if it takes off. If the company expands over time, it may decide to take on full-time management.

4. Need for a backup plan

One of the main motivations for moonlighting is to have a backup plan. It develops from employment uncertainty and serves as a fallback. Following the pandemic, unemployment has become a widespread problem, and individuals are looking for other sources of income.  

5. There is no need to hold on to steady jobs

People now understand that work is not limited to 9–5 occupations. A person must rely on professionals for their task, and there may be high-paying and other projects. Thus, it can be advantageous to labor as needed and to include some additional work and compensation. 

6. Chance of change in career

Moonlighting is a fantastic way to try a second job while maintaining a normal work schedule because transferring jobs might be difficult at times. As a result, moonlighting provides an opportunity to build experience in a talent that eventually leads to profitable employment. 

7. Personal Satisfaction and Diversification

Some employees simply like completing a variety of tasks. They could enjoy the diversity and difficulty of balancing several roles. Additionally, moonlighting can broaden their experience and help them become more versatile workers.

8. Cost of Living Pressures

Several employees are forced to work part-time due to rising living expenses, particularly in cities. Many people look for other sources of income because it can be difficult to cover costs like rent, groceries, and transportation, even with full-time work.

9. Ethical moonlighting

In organizations, ethical moonlighting presents a variety of work prospects and motivates employees to give it a try. Organizations must, however, use written policies that specify the necessary requirements in order to protect their business interests. 

Tips to Prevent Moonlighting by Employees

Be Open With Your Employees 

Companies should be transparent with their employees about their employment contracts. During onboarding, HR will go into detail with candidates on things like: 

• Why is moonlighting not allowed at the company? 
• How will moonlighting impact the company?
• What will happen if they choose to moonlight?

They will also have a one-on-one with any current employees who are suspected of moonlighting. During the conversation, HR will ask things like if they are following their passion by having a second part-time job, or if they are experiencing financial difficulties. Or can they help manage the employee’s financial difficulties by upskilling them and providing skill-based career progression? These conversations will build trust with the employee and show them you care about them, and may reduce the likelihood of moonlighting.

Create Moonlighting Policy

Making a policy is the first and most important step in preventing moonlighting. However, it's important to address some of the issues before creating the policy, like: 

• Is it strictly forbidden for employees to work two jobs at once?
• Are side gigs and part-time jobs forbidden for employees?
• Are workers not allowed to work in other industries or even in the same industries?
• If an employee is discovered to be working two jobs without permission, what would happen?

The policy's performance standards, disclosure requirements, and penalties for breaches can all be written out in depth. For employee reference, think about including a reference to the policy in the handbook.

In the employment contract, you may include the following clauses:

• Non- compete

Contracts known as non-compete agreements are signed by employees before their employment. An employee who signs a non-compete agreement commits to avoid working for a rival company for a predetermined period of time following their present job.

• No Challenge to Performance

If employees are permitted to work part-time or as a side gig, HR must create a policy outlining what is expected of them in their jobs.

Competitive Compensation and Appraisal Programs

One of the main motivations for moonlighting is to achieve financial security and cover the costs. Employees often work two jobs while living expenses rise, since they are paid less. In order to discourage moonlighting and retain current personnel, make sure that salary, performance reviews, annual bonuses, and other benefit plans are competitive enough.

 Encourage Employees to Develop Professionally

Organize training and certification programs to help team members become more proficient in their specialties. Encourage your employees to engage in various initiatives that will enable them to develop a variety of skills and experiences.

Many workers choose to work two jobs in order to grow their careers and expand their skills. They wouldn't have to work outside of their principal employment if they received the required in-house training.

Educate Employees Regarding Ethical Practices

But let's be honest, you've got to make sure your salary levels, performance reviews, bonuses, and all the other benefits are competitive too, if you want to keep your best staff from looking elsewhere for better opportunities. That means paying people a wage that reflects their true worth to the company and giving them a chance to really make the most of their role. These will help them learn the rules of the game and a code of behaviour to live by - and hopefully give them a real sense of what it's like to work with a company that genuinely cares about loyalty, compassion, diversity, and honesty. This should help them understand why we take conduct at work very seriously, and why moonlighting - especially the dodgy kind - is a no-go. If none of that works, you may need to think about using some kind of time tracking software to help keep an eye on things and make sure everyone is pulling in the same direction.


If none of that works, you may need to think about using employee productivity tracking or time tracking software to help keep an eye on things and make sure everyone is pulling in the same direction.

Use a Time Tracking and Productivity Analysis Tool

If you are still unable to prevent moonlighting within your company after using these strategies, you might want to think about utilizing time-tracking software that is intended to monitor and enhance office efficiency.

You can think about utilizing Maxeltracker's time-tracking software. This software automatically gathers your workers' work time information from a variety of apps, including Jira, Slack, and fills in AI-powered timesheets based on the number of hours spent on various tasks. This can assist employers in determining how productive their workers are and whether they are using their time for work-related activities or not. Employers may be able to identify moonlighting to some degree by using this insight into work-time data to better evaluate individual productivity levels. Low production trends can be caused by a variety of factors, including moonlighting. So look out for other signs, too, along with low productivity, to identify and stop employee moonlighting.

Take Necessary Disciplinary Action Whenever Required

Whenever needed, create an environment that is transparent, empathetic, and open. This will give your employees a sense of trust and care for them. But remind them of the consequences of moonlighting periodically, especially if you suspect any employee is doing it. But periodically remind them of the repercussions of moonlighting, particularly if you think any employee's actions are questionable. They will remember that such immoral behavior is not acceptable thanks to this reminder. Additionally, in the event of a contract breach, the employer may take severe measures.

Note: Keep in mind that an employer cannot take such disciplinary action against an employee if they haven't signed a contract prohibiting them from working two jobs or moonlighting.

The following are some possible disciplinary measures for employees who moonlight:

• Sending out warning letters
• Employee suspension for a predetermined amount of time
• PIP (Performance Improvement Plan) implementation

Termination in the event of significant harm, such as disclosing private information to a rival

Bottom line

Moonlighting has become a profitable way for employees to combat the rising cost of living, increase their monthly income, and develop financial security. However, it gives rise to serious issues for companies, such as the possibility of client poaching, diminished productivity among employees, and conflicts of interest.

The majority of nations lack strict legislation that forbids workers from working numerous jobs concurrently. Employers may, however, request that the HR division create a clause in the employment contract that helps them reduce this risk. To avoid legal problems, companies must research pertinent laws and regulations that apply in the relevant area before developing the policy.

Employers must have suitable systems in place to support employees in achieving professional progress in their careers while acquiring additional skills in their streams, regardless of whether the individual engages in moonlighting. These procedures can greatly lessen the prevalence of dual employment and promote a collaborative and trusting society.