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Does Your Company need a Moonlighting Policy?

Are you concerned about moonlighting employees? In many cases, staff members who work second jobs, with or without your knowledge, do no harm to your business. However, you may want to institute a moonlighting policy to protect your firm.

Among U.S. workers, 5.4 percent hold two or more jobs. The top reasons:

  • To meet expenses;
  • They enjoy the work;
  • To pay off debts;
  • To save for the future;
  • To buy items, like a car; and
  • To get experience.

– Source: U.S. Bureau of Labor Statistics

Should you require employees to disclose outside employment? Generally it’s not necessary unless there’s a conflict of interest. Asking questions such as what days and how many hours employees work outside of their jobs only makes them defensive. Don’t always assume that outside employment will negatively affect someone’s job performance. If, for example, the employee takes a second job to indulge a hobby or put money in a child’s college fund the satisfaction might have a positive effect.

Whatever you do, don’t impose a ban on all outside employment. You not only damage morale, but you also run the risk of violating the law. Moonlighting policies and practices vary according to state law. Many states side with an employer ban only if there’s exposure through conflict of interest.

Consider the ramifications of outside employment and decide if your company needs a policy. Here are the main issues:

Proprietary information and conflicts of interest. Employees generally accept reasonable restrictions such as a policy that prevents them from sharing inside business information and working for a direct competitor. Some companies also extend this policy to exclude outside employment by vendors or clients, to prevent the appearance of conflict of interest.

Acceptable levels of job performance. An employee’s loyalty should belong to the primary job. Moonlighting can cause employees to fall asleep, show up late, refuse overtime or be unable to take a business trip.

But these job performance problems can crop up from time to time for various other reasons too — such as partying, taking college classes and experiencing marital discord — not just because someone is moonlighting. Employees must understand and agree to accept the responsibilities of their jobs.

Misuse of company property. Some employees work for themselves after hours — or even during their shifts — using employer computers, phones, copiers, supplies and other property. There have even been cases of companies being held legally liable for shoddy work done on their premises by employees who were working independently.

What Should a Moonlighting Policy Say?

Simple is generally best. A policy in your employee handbook or employment contracts might read:

Employees of XX Company have the right to hold outside jobs as long as: They do not work for XX Company’s competitors, vendors or clients; they do not share XX Company’s proprietary information; they meet expected performance criteria; and they do not let the second job interfere with work requirements and schedules, including business travel and overtime.

If an employee’s outside work causes problems in any of these areas, XX Company will ask the employee to terminate the second job in order to remain employed by XX Company.

Consult with your human resources adviser or attorney for assistance in drafting a policy. ManagedPAY can help, contact our HR department.

Reprinted with permission from Thomson Reuters 05.2021

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