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What is moonlighting? How can companies prevent it?

Recruitment | 8 Min Read

What is moonlighting? How can companies prevent it?


Moonlighting means working a second job along with a regular nine-to-five employment. The concept has been in the industry for some time, but the pandemic-induced culture has increased moonlighting flexibility for employees. As a result, various food delivery applications, like Zomato, have changed policies to accommodate dual employment opportunities for employees. However, many IT players, such as IBM and Wipro, are against moonlighting because it raises multiple security concerns. It increases the risk of accidentally or intentionally revealing the company’s confidential information to another firm, causing revenue losses.


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What is moonlighting?

According to the Cambridge Dictionary, “moonlighting is the act of working at an extra job, especially without telling your main employer.” The concept emerged from the moon, which means that the employee is working at a primary job during the day and working at another job during the night.

Moonlighting became prevalent with the advent of the work-from-home and remote working culture during the COVID-19 pandemic. Many employees took second jobs to fulfill financial needs, passion, and other reasons. Thus, the gig economy rose, and incidents of moonlighting increased.


Why do employees moonlight?

According to research by Kotak Institutional Securities, nearly 65% of respondents from the IT/ITeS industry conveyed that they are either moonlighting or know someone who is engaged in moonlighting.

There are various reasons for employees to opt for moonlighting; the following are some of them:

Fulfilling financial needs

Many employees are not able to pay their bills or bear the overall expenses with the salary earned from a single job. They may have multiple responsibilities such as loans, family, and medical expenses that can be fulfilled with an extra income. This financial crunch leads them to take another job.

Taking advantage of the talent shortage

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Along with the IT industry, many knowledge and service-based industries such as finance, design, marketing, and others are facing a talent crunch and opting for gig work platforms to find talent for various job profiles. Therefore, it has encouraged the talented workforce to take a second job.

Safeguarding against sudden layoffs

According to the Wall Street Journal, Meta, one of the tech giants and the parent company of Facebook, laid off thousands of its employees in November 2022. Amazon also plans to lay off nearly 10,000 employees across different divisions, and its CEO Andy Jassy said in an official note that the layoffs will continue in 2023.

The possibility of layoffs is encouraging employees to take second jobs to secure their future and cope with the financial crunch that may occur.

Pursuing passion

While working in the primary job, many employees begin working on a side hustle or a business venture they have always been passionate about. It is a safe way to pursue passion and continue a full-time job when more than venture earnings are needed to pay monthly expenses or secure the future. Once these employees gain confidence that they can rely on their ventures for earnings and the future, they leave their primary jobs.


Why are companies against moonlighting?

Though taking up two or more jobs is common, many employers consider moonlighting a violation of policies, an ethical issue, and one of the major reasons for reduced productivity.

Following are the reasons companies are against moonlighting:

Violation of company policies

When a person joins a company, they sign an agreement that explicitly mentions that they can’t work with any other organization. The agreement eliminates data breaches, security thefts, low productivity, and many other challenges. Moonlighting violates the agreement and can jeopardize company data.

Possibility of data breach and theft

Data is the most sensitive component of any company. As per The Future of Cyber Survey by Deloitte, the prime difficulty in managing cybersecurity arises due to the transformation and

hybridization of IT. With hybrid and remote work cultures, cybercriminals are prying on the company’s data.

If an employee is working for a competitor, that company may monitor their data access, causing a security loophole. Also, employees may voluntarily share data, information, strategies, and internal secrets with competitors, and the consequences of these actions prove harmful to the organization.

The data breaches and theft incidents due to moonlighting incur losses of billions, along with mistrust and unreliability among customers.

Reduction in productivity

According to g2.com, productivity reduces by 40% due to multitasking. Simultaneously working on two jobs leads to increased stress, burnout, and reduced ability to solve problems and develop solutions.

The reduction in employees’ productivity impacts the company’s output and profitability. This factor introduces difficulties in meeting organizational goals.

Utilization of working hours for other jobs

Employees may utilize the primary job’s working hours to carry out the side jobs. Many employees use the remote working culture to execute tasks of secondary jobs during working hours as it is not possible to track if an employee is dedicating their entire time to their primary job. This leads to irregularities in the delivery of work or not carrying out specific tasks.


Law on moonlighting: Is moonlighting legal or illegal?

With the ongoing debate and the global disapproval of moonlighting, it is important to see the legal side of this concept. Following are some laws that dictate the terms related to working for a second employer with your primary job.

According to the Factories Act, during the tenure at a factory, an employee is not allowed to work at any other factory.

According to the Shops and Establishments Act, employees are not allowed to work for other employers on holidays or leaves, and an employer cannot permit an employee to work for other establishments.

According to the Industrial Employment (Standing Orders) Central Rules, Section 8 and Schedule, I B, “A workman shall not at any time work against the interest of the industrial establishment in which they are employed and shall not take any employment in addition to their job in the establishment, which may adversely affect the interest of their employer.”

Under these terms, once signed with an employer, an employee should not involve in a second employment or work for any other employer or establishment. This shows that moonlighting is illegal to a certain extent, and companies must take effective methods to control or prevent moonlighting.


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Effective methods for controlling employee moonlighting

Commenting on moonlighting, Rajeev Chandrasekhar, the Union Minister of State for Entrepreneurship, Skill Development, Electronics & Technology of India, said, “Efforts of companies to pin their employees down are doomed to fail.”

Therefore, taking extreme measures may backfire. However, using strategic and thoughtful steps and implementing effective methods like the following can help control moonlighting.


Take regular feedback

Take feedback regularly to determine if employees feel underpaid or are insecure about possible layoffs. If any other issue lingers in their minds, their feedback will give insights into their psyche and approach toward work.

Mercer | Mettl’s 360-Degree Feedback Tool helps HR professionals and employers receive holistic employee feedback.


Carry out thorough background checks

Regularly carrying out background checks will help companies keep a check on moonlighting. Conducting EPFO checks will give the information about any additional contribution. It helps determine any dual employment status.

Also, companies can tie up with analytics and security companies to carry out audits and keep track of any suspicious activities.


Provide necessary training to develop skills

Employers should assess whether their employees are learning or they need additional training to avail necessary skills that help them thrive.

Without proper learning and development support, employees are encouraged to opt for side jobs that offer growth opportunities and better financial stability. Therefore, it is necessary to carry out the skill gap analysis and fulfill the training needs.

Mercer | Mettl’s Training Needs Analysis helps gain insights into the skill sets that need to be developed for employee growth. In addition, Mercer | Mettl Leadership Assessment helps determine critical areas that help employees become leaders in the future.


Introduce the moonlighting policy

Instead of banning employees from moonlighting, companies can take a diplomatic approach. For instance, Swiggy, one of the largest food delivery startups in India, introduced moonlighting policy that enables their employees to take gigs and jobs outside the company. Along with Swiggy, Tech Mahindra is also coming forward with the idea of introducing a moonlighting policy.

This approach shows that the company cares about employees, which inspires employees to work with more vigor, passion, and enthusiasm.


Pros and cons of moonlighting

As every coin has two sides, there are two sides to moonlighting. The following are the pros and cons of moonlighting:


  • Extra source of income
  • Broad exposure and opportunity to work in different roles and projects
  • Opportunity to grow skill set
  • Widened professional network
  • Financial security to cope with uncertainty, such as layoffs


  • Difficulty in managing two working schedules
  • Burnout and reduction of productivity
  • The collapse of work-life balance
  • Less time and attention toward maintaining physical health
  • Security concerns of both companies



There is a divided opinion about moonlighting, as employers and employees have different approaches. Employees should be transparent and share their concerns before opting for moonlighting, and employers can opt for different methods, such as taking regular feedback, providing training sessions, and introducing policies to control moonlighting. Finding a balanced solution will help keep talented employees on board and build long-term relationships.

Originally published December 19 2022, Updated December 19 2022

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About This Topic

Employee engagement is a process by which companies undertake specific activities to interact with employees and engage them. The activities include employee development, team building, skills development, trainings etc.

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