Moonlighting policy template
Copy the text below and replace everything in square brackets with your company details.
1. Purpose
This policy explains when employees of [Company Name] may take up work outside their employment, so that outside activities do not conflict with their duties, the Company's business or its confidential information.
2. Scope
It applies to all full-time employees, including those on probation or serving notice. It covers any outside work, paid or unpaid: a second job, freelancing, consulting, gig work, a directorship, running a business, and creating online content for payment. Part-time staff and consultants follow the terms of their own contracts.
3. Definitions
- Moonlighting: taking up work for another employer, client or own business while employed full-time by [Company Name].
- Working time: the employee's rostered hours, including hours worked from home, on-call duty and approved overtime.
- Competitor: any business that offers products or services similar to those of [Company Name], or bids for the same customers.
4. Policy
- Full-time employment with another employer while employed by [Company Name] is not permitted.
- Other outside work needs prior written approval. It will be approved only if it does not compete with the Company or serve its customers, suppliers or competitors, takes place outside working time, uses no Company equipment, software, data, code, designs or contacts, and does not affect attendance, performance or availability for shifts.
- Unpaid community, religious, charitable and academic activities that meet the same conditions need only a declaration, not approval.
- Anything created in the course of employment, or with Company resources, belongs to the Company as set out in the appointment letter.
- No outside paid work may be done while on leave from the Company, including sick leave.
5. Procedure
- Before starting, submit the outside work form below to your reporting manager and HR.
- HR and the manager decide within [Number] working days. They may approve, approve with conditions or decline, and will give reasons.
- Approvals are valid for [12] months and are renewed through the annual declaration.
- Undisclosed outside work that breaches this policy is handled under the Disciplinary Action Policy. Undisclosed full-time employment elsewhere, or work for a competitor, is treated as major misconduct.
Outside work form
Name of organization or activity: [Name]
Nature of work: [Description]
Hours per week and timing: [Number] hours, [Days and Times]
Paid or unpaid: [Paid or Unpaid]
Any link with Company customers, suppliers or competitors: [Yes or No, with details]
Employee signature: [Signature] Date: [Date]
6. Responsibilities
- Employees: disclose outside work before starting it, and keep it within the approved conditions.
- Managers: decide requests fairly, and raise concerns about performance or availability with HR.
- HR: keep approvals and declarations on file and run the annual declaration round.
7. Exceptions
Passive investments, rent from property, and up to [Number] paid talks or guest lectures a year with no link to competitors need no approval.
8. Review
[HR Head Designation] reviews this policy every [24] months, and sooner if the Company changes its remote work arrangements or sees a pattern of undisclosed outside work.
What to include
Second jobs versus side activities
Treat a second full-time job differently from teaching, art, content creation or a family business. A blanket ban on everything is ignored, while a clear distinction is respected.
Conditions for approval
List the tests: no competition, no conflict, outside working time, no company resources and no effect on performance. Managers can then decide requests the same way.
Company resources and IP
State that company laptops, software licences, code, designs and contacts may not be used for outside work, and that work created with them belongs to the company.
Remote working time
Define working time to include work-from-home hours and on-call duty. Moonlighting disputes often arise when remote staff treat home hours as flexible.
Leave and notice periods
Say that outside paid work is not allowed during leave and that the policy applies until the last working day, including the notice period.
Evidence before action
Require facts and a chance to explain before any action. Rumours about second jobs are common and often wrong.
Common mistakes to avoid
- Banning every outside activity, including teaching or a family shop, which pushes people to hide them.
- Having no approval route, so each manager decides differently.
- Leaving work-from-home and on-call hours out of the definition of working time.
- Saying nothing about intellectual property, which matters most in software and design roles.
- Acting on rumours of moonlighting without evidence or a chance to explain.
Run it in ZeniaHR
File approved outside work forms and annual declarations in each employee's Employee Documents, with an expiry date matching the approval period so renewals show up. For remote staff, attendance punches and approved work from home requests show when the employee was on duty, which helps if a question arises about outside work in working time. Access Control data scopes let you keep these records visible only to HR and the employee's reporting hierarchy.
See it on your own data
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Book a free demoSee pricingFrequently asked questions
Is moonlighting legal in India?
It depends mainly on the employment contract and company policy. Many appointment letters include an exclusive-service clause, and taking a second full-time job in breach of it can lead to disciplinary action. Many companies allow side work with approval when it does not compete, uses no company resources and happens outside working hours.
Can an employee freelance alongside a full-time job?
Only if the company's policy allows it and the work is approved. Freelancing is usually acceptable when it is for non-competing clients, done outside working hours, uses no company laptops, software or code, and does not affect performance. The employee should disclose it in writing before starting, so there is no dispute later.
What happens if an employee is caught moonlighting?
The company should first check the facts and give the employee a chance to explain. An undisclosed second full-time job or work for a competitor is usually treated as serious misconduct and can lead to termination after a fair process. Harmless side work that was simply not declared is better handled by asking for a declaration and setting conditions.
Does a moonlighting policy apply during the notice period?
Yes. Employees remain bound by their employment terms until the last working day, so outside work during notice needs the same approval. Joining a new employer before the relieving date is a frequent cause of disputes over notice pay and relieving letters, so agree any early release in writing instead.