More than four million American workers held both a full-time job and a part-time job at the same time in 2022, according to the Department of Labor's Bureau of Labor Statistics. A few hundred thousand more workers held two two-full-time jobs at the same time in 2022. When employees have a second job in addition to their full-time job, it is often referred to as moonlighting.

Employees may moonlight for a variety of reasons, including financial need, a desire for more challenging or fulfilling work, to learn a new skill, or to start their own business. Some employers contemplate policies on outside employment because they are concerned that moonlighting can have a negative impact on productivity, safety, and other business outcomes.

Here are 7 answers to frequently asked questions about such policies.

Q1: Can I have an outright ban on moonlighting when an employee is employed by my company?

A: Some states and local jurisdictions have laws that may prohibit such policies. Here are two examples.  

Also keep in mind that some states have laws that prohibit employers from taking adverse action against an employee for any lawful off-duty conduct, including outside employment. In states with broad protections covering any lawful off-duty conduct, employers may be required to show this type of restriction protects a legitimate business interest. For instance, the employer may be required to show that the second job would interfere with business operations.

Even in the absence of prohibitions, it isn’t considered a best practice to ban all moonlighting.

Q2: An employee’s productivity has fallen off lately, and I heard they are moonlighting. What should I do?

A: Employees who are also moonlighting should be held to the same performance standards as other employees. If an employee's job performance suffers, the focus should be on factual observations of their work, rather than on the moonlighting itself. Additionally, never assume you know the cause of a dip in productivity. 

If an employee isn't meeting performance expectations, meet with the employee in private, express your appreciation for their contributions, and be straightforward. Let them know you've noticed issues with their performance and give examples. Explain that you are trying to help the employee improve and give them an opportunity to respond. If the employee mentions they are working two jobs, remind them they are still expected to meet the performance standards in the job with your company. 

At the close of the meeting, confirm that the employee has fully understood the expectations for improvement and have them acknowledge the discussion in writing.

Note: During the meeting, the employee may reveal information that can trigger certain obligations. For example:

• If the employee discloses that the reason for their change in performance is because they're a victim of sexual harassment, launch a prompt investigation into the allegations.
• If the employee reveals they have a disability, you may be required to provide a reasonable accommodation to the employee.
• If they reveal symptoms of burn out, offer company resources that may help, such as an Employee Assistance Program, and help them develop a plan for improving.
• And, if they are having difficulty working with another employee, guide them through resolving workplace disagreements.

Q3: Can leave policies prohibit employees from working for another employer (or themselves) when they take leave for the stated purpose of being unable to work or caring for a family member?

A: Employers generally may prohibit employees from other work while on family and medical leave, sick leave, and other leaves when the leave is taken because the employee is unable to work or is supposed to be caring for a family member.

Q4: We've had issues with employees saying they can't work their assigned schedule because of their side job. Instead of banning moonlighting outright, can my policy indicate that full-time employees should treat the job with my company as their primary job?

A: Generally, yes. The ability to meet assigned work schedules should be a part of the job requirements, and should also be included as a provision in relevant policies.

Make clear that employees holding outside jobs must continue to perform their normal work requirements within the scheduled work week and that your company is under no obligation to adjust work assignments and schedules to accommodate an employees’ outside jobs.

Note: Some states and local jurisdictions have enacted laws requiring employers to post schedules at least 14 days in advance and to pay penalties if they make changes without sufficient notice. Employers should check applicable laws to determine if they are subject to such requirements. Even in the absence of such requirements, employers should try to give employees as much advance notice of their schedule as possible.

Q5: Can I ask employees to disclose outside employment, so I can determine whether there is a conflict of interest?

A: To help prevent conflicts of interest, some employers require employees who moonlight to disclose outside employment or their intention to seek a second job. Others rely on their employees' judgment and ask employees to speak with their supervisor, if there is any doubt. If an employer requires disclosure, the policy should indicate why the employer wants this information (to determine if a conflict of interest exists) and include examples of situations that may present a conflict of interest.

The policy should also indicate that employees may be asked to end/decline outside employment if it presents a conflict of interest or compromises other business interests, if permitted under state and local law.

Q6: Can I ban employees from using our company equipment and company time to perform work for an outside job?

A: Yes, employers can (and should) prohibit employees from using company equipment and/or work time to perform work for an outside job.

Q7: It seems like a growing number of my employees are moonlighting. Should I be concerned?

A: As mentioned above, employees may moonlight due to financial need, a desire for more challenging or fulfilling work, to learn a new skill, or to start their own business. Some of these reasons could lead to lower productivity and/or higher turnover. For example, if an employee is underpaid or isn’t offered challenging work, they could be less motivated and more likely to leave eventually for another job.

You may want to conduct anonymous employee surveys to determine how engaged employees are and how they feel about working for you. Then, consider adjustments based on the feedback you get.

Conclusion

Moonlighting policies must be drafted carefully, with a focus on performance and expectations. Employers may want to consider working with their legal counsel when drafting such a policy.