Know All About Moonlighting in India

The term ‘Moonlighting’ has become popular nowadays. Companies are framing strict policies around moonlighting, and many top company owners have given their opinion on moonlighting by their employees. It has become an important topic of discussion for companies and employees.

Concept of Moonlighting

The term ‘Moonlighting’ became popular in America when people started working a second job in addition to their regular 9-to-5 jobs. Since the rise of the work-from-home concept during the pandemic, employees got free time after work hours. While some took up their hobby in their free time, others started searching for part-time jobs. Especially in the IT industry, employees took up two jobs simultaneously and took advantage of the remote working model. This concept of working for two companies/organisations is referred to as moonlighting.

Meaning of Moonlighting by Employees

Moonlighting by employees means that the full-time employee of a company takes up an extra job, usually without the employer’s knowledge. In India, moonlighting by employees increased after the COVID-19 pandemic and the work-from-home model, especially among IT sector employees. There is no legal framework around moonlighting by employees of IT companies. The labour laws in India prohibit dual employment by workers of a factory. But, workers do not cover the IT sector employees. 

Employees in the IT industry are bound by their offer letters which they accept before joining work. Many companies state in their offer letter that dual employment is prohibited or that the employee should not work for another company while working with them. In such cases, the employees should not resort to moonlighting, or they may be removed from their jobs.

Moonlighting Policy for Employees

In India, employee moonlighting has gained attention, and the top companies are opinionating on it. There is still no clear-cut answer to whether moonlighting is ethical/legal or not.

Companies and their HR department are responsible for making a policy on moonlighting. Thus, the moonlighting policy may vary from one company to another. A few companies have already framed a policy on moonlighting, while a few others are yet to prepare a clear-cut policy on this aspect. However, most companies prohibit their employees from working in organisations that are in the same line of work since it leads to a conflict of interest. Even when some companies do not have a separate policy for moonlighting, they prohibit dual employment of employees by adding a clause in the employment offer letter.

How to Find Out if an Employee Is Moonlighting?

Companies can know if an employee is moonlighting and working for its competitors using their Universal Account Number (UAN) of the Employees’ Provident Fund (EPF). Companies can access an employee’s UAN number to get to know if two PF contributions are being made by different companies. When two PF contributions are being made simultaneously to a UAN, it is a clear indication of moonlighting by the employees.

Wipro fired 300 employees for moonlighting by tracking the EPF accounts maintained under the UANs. However, it isn’t easy to find moonlighting by an employee when he/she takes up additional work as a consultant, freelancer or part-time since an employer does not make the PF contribution for such work.

However, companies may start deploying new-age technology to track devices given to employees solely for office work and get to know when an employee uses it to do another company’s work. They may also hire a third-party agency for background checks to find out about moonlighting by an employee.

Latest Updates on Moonlighting Policy by Companies

Certain companies support moonlighting, while many top companies are against employee moonlighting. Let’s look at companies which are in favour of moonlighting:

• Swiggy announced a moonlighting policy for its employees, allowing them to work on other projects under specific conditions after working hours.
• Nova Benefits supports moonlighting and allows employees to try new options and pursue their interests or passion outside work hours.
• The CEO of Tech Mahindra, C P Gurnani, stated that he might consider allowing moonlighting. He approved of employees being allowed to take extra work, but they should be open about it.

Below are the companies which prohibit and do not allow moonlighting:

• Wipro CEO Rishad Premji recently called moonlighting as cheating and fired 300 employees after discovering they worked for competitors.
• IBM has warned employees against moonlighting.
• TCS has stated that moonlighting is an ethical issue and is against its values and culture.
• Infosys has warned employees against moonlighting. However, it has allowed employees to take up gig work outside the company hours with prior approval from HR and industry executives.

Employees moonlighting or planning to take up a side job must look at the clauses of their employment contracts and company policies regarding a second job/employment. Many IT companies have contractual/confidential clauses to restrict dual employment. Even when there are no such clauses, it is better to speak with company HR and find out the company’s moonlighting policies before going ahead.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@clear.in