Corporate Payroll Services

Moonlighting, The Good & The Bad

Should you allow your employees to moonlight at a second job?  Is it against the law to prohibit moonlighting?  In some states it can be illegal.

Many employees moonlight at a second job because they need a second source of income.  As inflation rises, it becomes more expensive to pay for basic needs such as food, shelter, etc.  As an employer you should be focusing on an employee’s performance including arriving to work on time, meeting work deadlines, and performing work well.

If you restrict moonlighting, it can increase turnover as some employees will potentially look for employment that allows them the freedom to work a second job.  Moonlighting is not necessarily a bad thing as long as they still have a “duty of loyalty” to their main employer.  The employee is prohibited from using their current employer’s equipment, contacts, and any intellectual property to help a competitor or to use it for their own business.

Employees who create a new, compatible (not competitive) business during their own time could establish a partnership with their current employer to benefit each other and still maintain the “duty of loyalty”.



If it becomes necessary, you as the employer can include a non-compete clause in your employment agreement to discourage employees from working with a competitor.  A non-compete clause does not last forever.  It can vary from state to state and it depends on your specific industry.

A non-compete clause can last during employment plus a defined period after separation (for example: one year after employment ends).

Non-competes generally are for a position where the employee is handling sensitive information, is involved in high level decision making, and can affect the company’s revenue.  These types of non-competes usually go to CEO’s, Vice Presidents, and Manager-level positions.  Non-competes are generally very hard to enforce, but can serve as a deterrent.

This post is provided by the HR Pros at HR Support Center. When you need essential information on human resources issues, from benefits, hiring and management, to culture, technology and regulations, HR Support Center is a resource on which you can rely.