What is the meaning of moonlighting?
The meaning of moonlighting or moonlighting policy refers to the practice of holding a second job outside of one’s primary employment. People engage in moonlighting for various reasons, including the need for additional income, pursuing a passion, or gaining experience in another field. They typically do this after regular work hours. Hence, the term ‘moonlighting,’ which implies working during the evening or night) or on weekends.
The moonlighting meaning in the HR industry has created much stir. Businesses are now divided into two schools of thought: ones that embrace moonlighting and, others that strongly oppose it. Nevertheless, neither wants a ‘second job’ interfering with their organization’s interest. As, employers believe that it hampers the productivity of their employees, which further affects the business.
Reasons contributing to the rise of moonlighting.
1. Work from home
During the lockdown, businesses saw a surge in the number of employees taking multiple jobs. A July Kotak Institutional Equities survey of 400 people across IT&ITES space, revealed that 65% knew of people pursuing part-time opportunities or moonlighting while working from home. According to the Times of India, ‘HR experts have attributed moonlighting as one of the factors that make many reluctant to come back to the office’.
Working from home is the perfect opportunity for moonlighting jobs. Employees can do the bare minimum at their regular jobs and invest their time in multiple sources of income.
2. Lack of commitment from employers
During the pandemic, several organizations across industries largely downsized. Many laid off their employees under the name of cost-cutting. As a result, many from the workforce were left without employment for a long time. An article by Forbes India talks about how this has created distrust among the workforce, who are now scared to settle for and entirely commit to one job.
3. Lack of employee skill development
A study by PwC’s India Workforce Hopes and Fears Survey 2022 revealed that:
Around 51% of employees in India stated that their employer is not imparting relevant technical or digital skills training needed for their career as compared to 39% globally.
As a result, employees are looking for more opportunities to upscale themselves by working on projects outside their regular employment.
4. Demographics:
Gen Z and Gen Alpha are very gig-focused, so much so that they are comfortable with the gig economy and hence moonlighting
5. Socio-economic culture influence:
Today are surrounded by so many influencers. They allow us to imagine a lifestyle that we have only dreamt about. But now, we want to experience the same lifestyle. And hence, employees intend to create multiple means of income to pay for that lifestyle
What are some ways in which employees moonlight?
The meaning of moonlighting isn’t just limited to having 2 jobs at the same time. It refers to any income-generating activity that an employee is involved in apart from his primary job. Here are some of the common moonlighting ways that employees considered to generate their side income:
1. Freelance projects:
Offering any form of skills or services like writing, coding, consulting, and graphic design to outside clients while having a primary job can be considered moonlighting.
2. Part-time jobs:
Having a part-time job for a supplement income, even if it is after your primary working hours can be considered as moonlighting.
3. Gig economy:
Taking up gigs like food delivery, property rentals or services on freelance forums is against the moonlighting policy of most companies in India. The gig economy is also one of the most common ways of moonlighting for employees because of the revenue they can generate while being flexible with what they can work on.
4. Training or coaching:
Any form of coaching or training in exchange for a fee is also against the moonlighting policy of most companies. However, guidance or mentorship as an act of goodwill will not fall under the moonlighting policy.
5. Artistic Ventures:
Another common form of moonlighting involves engaging in artistic ventures like painting, composing music, writing a book, or even developing an app. While many pursue these activities to fuel their creativity and for sheer enjoyment, they can also generate income, making them a viable source of additional revenue.
Now that you know about the meaning of moonlighting and the reasons why it has become so popular, let’s look at how companies are tackling the issue of moonlighting.
Moonlighting Policy
- Purpose and Scope: Clearly define why the policy is in place and to whom it applies. This can address the company’s concerns about productivity, confidentiality, or conflict of interest.
- Disclosure Requirements: Notify the HR department or your supervisor about any secondary employment to aid transparency and ensure that potential conflicts are addressed promptly.
- Conflict of Interest Clause: A detailed section that outlines what constitutes a conflict of interest. This could include working for direct competitors or using company resources for secondary employment.
- Performance Expectations: While employees might take up secondary jobs, they should be aware that their performance in their primary jobs should not be compromised.
- Use of Company Resources: Emphasize that company resources, including time, equipment, or proprietary information, should not be used for moonlighting activities.
- Non-compete Clauses: While this is not always about moonlighting, a non-compete clause can prevent employees from engaging in activities that might harm the company post their employment.
- Consequences for Policy Violations: Clearly lay out the repercussions if the policy is not adhered to.
Benefits of Having a Moonlighting Policy
- Clarity: Both the employer and the employee are clear on what’s expected, leading to fewer misunderstandings.
- Protection: Companies can protect their interests, especially when it comes to proprietary information or competition.
- Transparency: A clear policy can lead to open discussions between employers and employees about their needs and concerns.
Reviewing and Updating the Moonlighting Policy
- Regular Reviews: As the employment landscape changes, so should company policies. Regular reviews ensure that the policy stays relevant.
- Feedback Loop: Employers should consider getting feedback from employees when crafting or updating these policies to address real-world challenges and concerns.
- Training Sessions: Regularly conduct training sessions to familiarize new employees with the policy and refresh the memory of existing ones.
Is moonlighting legal in India?
There aren’t overarching laws in India regarding moonlighting. However, certain moonlighting cases might question data confidentiality or bring conflict of interest. Especially when an individual chooses to moonlight with companies that are direct or indirect competitors.
Yet, certain laws in India prohibit dual employment.
Firstly, according to the Factories Act, during an employee’s working period at a factory, he/she cannot work at any other factory.
Secondly, the Shops and Establishments Act talks about how an employee cannot work with other employers on holidays or leave. It further puts the onus on the employee to make sure that he/she is only working with one employer at once. Yet, it also puts the responsibility on the employers to take proper precautionary measures.
Thirdly, Industrial employment (standing orders) Central Rules
Under section 8 in its Schedule, I B, this act issues an order for ‘exclusive service’. It says:
‘A workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer.’
Any breach of these acts by an employee can lead to adverse actions against him/her. Termination, a lawsuit, hefty payment to the employer, etc. are some end actions taken against the employee.
Can employers prevent moonlighting?
Yes, there are multiple ways in which employers can prevent moonlighting. They are:
1. Take regular feedback to understand if your employees feel underpaid or insecure about their job
Most employees indulge in moonlighting to earn extra income. If your employees are satisfied with their primary salary, the chances of them taking up a second job are reduced.
Next, employers must sensitively deal with the distrust created in the workforce during the pandemic. Large-scale layoffs have filled the workforce with fear. Here, making your employees feel more secure about their jobs is important.
2. Ask the right questions
Do your employees feel connected to what they’re working on? Do they see the impact of what they are creating? Or, do they only see it as a bunch of tasks that they can do somewhere else for more money?
Do your employees feel like they belong to a team? Are they cared for? Do they know what is the meaning of moonlighting and what is considered under the policy?
Research published by Kansky (1994) says that- employee behaviour is a response to what he or she experiences at the workplace. It’s reciprocity. If they experience care and belongingness, they will respond with commitment.
So, don’t close the door. Don’t say moonlighting is bad, don’t say ‘Quiet quitters, I don’t want you here’, and don’t close the door. Have conversations. Find out where it’s not working and try to solve the problem
3. Conduct a recurring background check
Instant digital EPFO checks conducted in regular intervals can help you keep an eye on what your employees are up to. It uses the provident fund database to check if your employee is simultaneously employed with another company. It is one of the checks packaged with IDfy’s ‘Infinity Checks’. You may run infinity checks on your employees regularly to prevent dual employment and other employee-related fraud risks. To understand more, click here.
4. Create a company policy. Here’s what a moonlighting policy means:
A moonlighting policy conveys that the employees will treat their work at a business as their primary job and won’t allow other jobs to interfere with the same.
The policy contains a moonlighting clause, which is a ‘Negative Covenant’. That is a clause that stops employees from performing ‘moonlighting’ or having more than one job at once. Both parties sign this clause and agree upon it (the employee and the employer).
An employer usually conveys the Moonlighting Clause to the employee via the offer letter, an agreement, or an employment contract. In India, this clause is enforceable wherever necessary.
Here is an in-depth blog, if you want to know more about moonlighting policy.
5. Invest in providing your employees with exposure and skill-development
A study by PwC’s India Workforce Hopes and Fears Survey 2022 revealed that:
Around 51% of employees in India stated that their employer is not imparting relevant technical or digital skills training needed for their career as compared to 39% globally.
As a result, employees may look for opportunities outside of their primary jobs to learn and grow.
To avoid this, employers may invest more in their employee’s learning and development. They must also teach them the meaning of moonlighting and clarify which activities are not allowed under the moonlighting policy. They may also provide their employees with the freedom to work outside of their usual job role within the company. It’s like creating an internal gig economy, where your employees can devote up to 20% of their time to in-house projects. Read more about it here.
While, the Moonlighting policy is something that companies have already adopted, other prevention ways are slowly growing.
We hope this blog helps you. If you have any other questions, do write to us at shivani@idfy.com