What Is Moonlighting? What Is Its Legal Status In India?

Moonlighting, also known as side or dual employment, occurs when someone works for one organization and takes on extra gigs without the knowledge of that company. Since the pandemic, working from home was the new normal giving employees extra free time after work. Consequently, some of them looked for part-time jobs. Many employees in the IT sector took advantage of remote work to work for two companies simultaneously. Moonlighting includes various activities, to earn extra income like doctors consulting after work hours, teachers giving tuition, consultants and freelancers working for different companies, and people participating in creative pursuits such as volunteering, music, singing, drama, theatre, and social media content creation.

Numerous short-term stints, such as those in website development and app production, were available throughout the pandemic. Some employees viewed these projects as swift opportunities to increase their income without interfering with their full-time jobs. Workers did not view these positions as having direct conflicts of interest because they did not require a full-time commitment.

Based on a survey by Kotak Institutional Equities, 65% of employees either have a second job or are in search of part-time options alongside their full-time work. According to experts, moonlighting is okay as long as employees remain dedicated and effective at their primary jobs. Also, in a recent study, 43% of employees expressed a preference for moonlighting. Many, however, think the real figure would be higher. This could be because of increasing dissatisfaction with the work culture and a desire for more significant engagement in their work.

Intellectual property, know-how, and data are essential resources for modern organisations. Employees who moonlight, especially for competitor businesses, run the danger of losing important information. Another issue is that doing work from home might entice some employees to take on after-hours professions.

Indian IT firms hold varying opinions on this employment notion. While some see it as unethical, others see it as a necessity. NG Subramaniam, the chief operating officer (CFO) of Tata Consultancy Services, considers moonlighting to be unethical. In a similar vein, Infosys cautions staff members from accepting a second job without first notifying the business. Infosys stressed the value of reading their employment contracts before looking for alternative employment in recent emails to employees. They even warned staff members that moonlighting during or after work hours could result in termination. Contrarily, CP Gurnani, CEO of Tech Mahindra, is amenable to the idea if it increases employee income.

Wipro recently fired 300 employees for engaging in moonlighting, which they discovered by monitoring EPF accounts under the UANs. Moonlighting is ethically acceptable in India. In order to eliminate worries about confidentiality violations, many employers limit employees from holding numerous jobs in their employment agreements.

The HR department at each firm is in charge of establishing its own moonlighting policy. As a result, each organisation may have a different policy about moonlighting. While some businesses have already developed definite policies about moonlighting, others are currently determining their position. To minimise potential conflicts of interest, many businesses, however, ban their staff from working for firms that are in the same industry. Companies sometimes contain a clause in the employment offer letter that forbids multiple works, even if they don’t have a separate moonlighting policy.

From a tax viewpoint, doing a second job is likewise acceptable in the US and the UK. Although it could have an impact on a person’s tax situation in the UK, it is unlikely to be expressly disclosed to the payroll department of the initial employer, especially in bigger businesses. The US tax system is less complicated because it relies on self-assessment and voluntary reporting,

When employees take on additional jobs as consultants, freelancers, or part-timers, which don’t need PF payments from the employer, it might be difficult to detect moonlighting. Companies may begin tracking devices given to employees only for work reasons using cutting-edge technology to allay worries that this problem would reduce employee productivity. They can tell if an employee is working for another firm using the device in this way. Additionally, some businesses may pay third-party organizations to perform background checks in order to find any evidence of staff moonlighting.