​Why your company needs a moonlighting policy

Check out the best practices to help employees and employers navigate the post-work world of moonlighting,

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Twelve years ago, TechRepublic published a story about the "hows" and "whys" of moonlighting, which Cambridge Dictionary defines as "the act of working at an extra job...without telling your employer."

At the time of the TechRepublic story, approximately 5% of the US workforce moonlighted—a percentile that pretty much remains the same today.

This begs the question: Why would someone consider moonlighting?

SEE: Employee non-compete agreement policy (Tech Pro Research)

Working on the side

I once knew a senior database analyst, who despite being promoted at his full-time job, did some moonlighting on data projects for another company and landscaping on weekends. When I asked why, his reasons included "insecurity with the company, a need to better myself and my skills, and the money." In addition, he still had student loans to pay off, just got married, and felt stagnate at work.

In another instance when I worked as a CIO at a relatively small company we needed a skilled DBA but couldn't compete with the larger firms in either salary or benefits. Solution? Contract with top talent from one of the larger organizations to work on a special project. The projects were performed on weekends or evenings. We got the skill-set we needed for our IT, and our contractors earned some nice money on the side.

Did we check with HR at the time? No—but we didn't have any company moonlighting policies, either. Did the contractors get permission from their employers to moonlight? Well, they "said" they did.

The bottom line is that employees with valuable skills will be tempted to moonlight—and employers should develop moonlighting policies, which present clear-cut guidelines to protect both the company and the employee.

SEE: Nondisclosure policy (Tech Pro Research)

4 best practices

1. Let your employees moonlight

Unless your company is engaged in unusually sensitive and proprietary work, which can withstand a legal challenge, it is unwise to prohibit your employees from moonlighting. While employees are at work, they are on company time and use company resources. They should not work on anything other than company business. After work, employees' time is their own. If they elect to take on a second job or project, the company has no legal right to control or dictate this activity, especially if it doesn't conflict with the company's business.

2. Execute non-compete agreements

If there is a risk to intellectual property, companies should clearly spell out what is allowed—and what isn't—by executing non-compete agreements with key employees.

Say you're in the pharmaceutical industry, and you hire a data scientist to develop proprietary algorithms for drug formulation software. You don't want that employee skipping across the street to do the same for a competitor. The law recognizes this right to intellectual property. However, if this skilled data scientist opts to sell cars on the weekend, there should be no opposition.

SEE: Tips for getting the most from your performance reviews (free PDF) (TechRepublic)

3. Create on-the-job performance rules

If you notice an employee's performance slack off, talk to the employee. If moonlighting contributes to tiredness at work, add it to the discussion. The employee either needs to show a marked improvement in performance and possibly cut back on or eliminate moonlighting, or look elsewhere for employment.

4. Inform management

Some HR professionals advocate that employers require an employee to notify them if the employee intends to moonlight. Where there is a potential conflict of interest this makes sense. But if the moonlighting opportunity is unrelated to the job that the employee performs for the company, and the employee performs well there are legal counter-arguments that warn employers not to trample on individual liberties. The best course of action if you are considering an "ask permission" policy is to consult with legal counsel first.

See also

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Image: Getty Images/iStockphoto

By Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...