How Can Corporates And Start-ups Deal With Moonlighting Employees

The recent trend of moonlighting among employees has alarmed the industry, especially the IT sector in India with many resorting to ‘Back To Office’ policies and several others outright terminating those engaging in multiple assignments.

While both HR departments as well as policymakers ponder over the business and financial implications it can have on organisations, including the threat of corporate espionage along with immediate and long-term impact on ethical, compliance and well-being of employees, here’s a look at the options available for the industry and ways to address the issue effectively, taking into consideration both the emerging trend and the future of work.

The recent pandemic, which all of us are witnesses to, has had its pros and cons for our economy. One of the notable positives among them, especially for those employed in the Information Technology (IT) industry is Work From Home (WFH), which has evolved since then and has come into its own as an acceptable practice for work execution either wholly or as part of a hybrid model. While it gave freedom to employees to work from the comforts of their home, making available extra time saved in commuting, it has also led to employees using such time to take up secondary job/s to earn additional income. Moonlighting, in simple terms, means employees taking up side jobs in addition to their primary employment and most often without the knowledge of their employer. It also means that the employees are simultaneously engaging themselves with more than one company, using their skills to get paid by all.

While this trend has been greatly influenced by the introduction of the gig economy in the Indian scenario where they are not contractually obliged to a single employer, COVID 19 and the WFH culture saw many full-time employees from software development, project management and accounting & finance indulge in side jobs. The difference however is that gig workers are mostly independent contractors and freelancers who are not contractually bound, while it constitutes moonlighting in the case of full-time employees.

While some argue that the skills used for side jobs need not necessarily be the same skills used in their primary job, the very fact that there is demand for a particular skill set and the domain expertise the employee is willing to offer for additional fees, points to employees using their core expertise and most importantly, the same skill sets to earn extra income from multiple sources and thus gainfully use the time available to them for their personal benefits. 

It further gets trickier with instances of employees using the benefits of parent organisations such as housing, rent, medical allowances, equipment such as laptops and all benefits of WFH including , Wi-fi allowance to offer services to another business entity or competitor to earn additional income.

Meanwhile, what is surprising is the justification of moonlighting and the lack of remorse among the Gen X. A recent media survey of a sample of 500 employees resulted in more than 60 per cent of the respondents considering it ethical, while only 23 per cent clearly understood it as an unethical practice.


Moonlighting has evoked mixed responses from the industry i.e some condemning it outright as an unethical practice and cheating. In fact, some notable and established players in the IT /ITeS segment took the extreme step of sacking employees who are indulging in moonlighting.

A few others have viewed it as a new trend to be watched and adopted with due care and caution. Some employers took a completely different view saying that any changes that usher into the existing framework of employment-related contracts need to be assessed objectively without resistance and possibly allow them if such practices address the real needs of those employees wanting to earn more without compromising on the issues such as confidentiality and organisational growth.

Corporates which are open to change as part of its work culture have expressed that the way an employee spends his time beyond working hours should not pose any concerns to them as long as there is transparency, confidentiality issues are taken care of, individual performance parameters are adhered to, and most importantly they do not work for competitors.

While this approach, to some extent, seems to resolve the issue for both employer and employee, resulting issues such as increased levels of mental stress and physical fatigue impacting productivity and quality of execution need to be addressed. Similarly organisations should also explore the long-term impact on a company’s image and other related risk exposures such as loss of reputation and size of order book etc. 


In progressive economies such as the United States, moonlighting and the start-up ecosystems blend well with each other. Entrepreneurs, mostly of start-ups, have hiccups on several fronts during their formative phases of evolution and intensely involve themselves to search for the best talent at an affordable cost till they firmly get their feet on the ground. 

Many moonlighters who are also in search of additional assignments during their spare time to gainfully use their skill and knowledge and who would not mind charging reasonably for the services they offer would be a perfect fit for start-ups. They both will be able to satisfactorily fulfill their respective objectives and become complementary to each other. Due to these perceivable advantages, moonlighting as a part of the work culture blends well with the start-up ecosystem in the US. An interesting fact is that most start-up founders in the US begin their journey practising moonlighting and attract good funding opportunities too.


We have heard of instances where techies work on as many as seven assignments simultaneously.  It quite naturally results in divided loyalties with far-reaching consequences on confidentiality and exposure to competitors and poses a threat to the adherence of moral standards, especially where some of the employees with specialised and much wanted skill sets holding critical positions engage themselves in moonlighting. 

Industries could also be wary of corporate espionage as a result of moonlighting. Imagine for a moment that an employee of a corporate having global presence engages himself/herself with rivals/competitors in the same industry within and outside the country and transfers knowingly or unknowingly highly proprietary skills (IP) and R&D-related information. 

Not only would it cause enormous damage and irreparable loss to his/her employer but if such leakage of proprietary information travels beyond national frontiers, which is quite possible, it would adversely impact the inward flow of foreign exchange earnings. 

Most crucially, the NDAs signed by the corporates would lose their sanctity, and they may end up in claims towards such breaches of confidentiality. 

Therefore there is a need for a cautious approach and to institute a robust governance mechanism in safeguarding the operational processes involved in work execution.


One of the future courses of action for the industry is to accept moonlighting as an integral part of the work culture on account of the merits it carries and adopt a flexible approach and same practices prevalent among start-ups, especially in more mature economies.

In such an event, there arises a need for appropriate policy prescriptions for Indian corporates, especially those belonging to IT and ITeS sectors. Corporates will do well if its HR policies mature to recognise moonlighting as a practice which has come to stay. 

Some of the possible policy prescriptions could be:

  • Creating adequate awareness about moonlighting.
  • Appraising management of the pros and cons of moonlighting.
  • Framing recruitment policies clearly defining the scope and work responsibilities vis-à-vis moonlighting.
  • Introducing separate layers in the scope of work execution with the required inbuilt governance mechanism.
  • Promoting a separate class of professionals engaged in moonlighting and designing HR policies around them within the permissible legal framework.

Moonlighting will certainly be a boon, given its merits as discussed above and at the same time, has the potential to turn out to be a bane if not guarded well.

We need a transformation in corporate HR practices, inculcate good work ethics as part of the work culture and also establish transparent and well-governed systems in place. 

Well-designed and matured HR policies governed by a robust corporate governance mechanism  would usher in an era of ideal corporate work culture accepting moonlighting as an integral part of its ecosystem.

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