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You live in the United States, and you are interested in moonlighting by taking on a job that is not your primary occupation. What can you do? How will this affect your tax return? Here’s an overview of what to expect when you decide to earn while working outside of full-time employment.
The “outside employment disclosure form” is a document that must be filed with the company’s human resources department. It is used to disclose outside employment and other financial information.
Many individuals work two or more jobs to supplement their income. Employers are usually unconcerned with this; nevertheless, in rare situations, it may affect an employee’s shift availability, productivity, and professional demeanor, among other things. If your organization decides it requires an outside employment policy, we’ll guide you through the dos and don’ts in this article. The goal here is to safeguard the company without restricting workers’ choices and rights unnecessarily.
Create your own moonlighting policy using our free moonlighting policy template to save time.
Company Policy on Outside Employment (Example)
What Is Outside Employment and How Does It Affect You?
To protect themselves against distracted or underperforming workers, several organizations implement outside employment or “moonlighting” rules. Any work that a person does outside of their employer’s job is referred to as “outside employment.”
So, if John Doe works for you but also has another job, possibly part-time, from the employer’s perspective, their employee is moonlighting or has an outside job. Simply put, it is a second job that is held in addition to one’s main work.
It’s worth noting that the term “moonlighting” refers to those who work a second job after finishing their day job in the afternoon or evening. Despite the fact that it is legal in the United States, many businesses have policies in place to ensure that ground rules are clear, understood, and do not adversely effect an employee’s connection with their employment or the company as a whole.
We’ve found that announcing or emphasizing this policy throughout the recruiting process, particularly during the new employee onboarding process, is the best way to go. This is most simply achieved by include a signature line on an onboarding form that requires the employee to affirm receipt, reading, and understanding of the employee handbook and any rules contained therein.
Why Do Employees Continue to Work Outside the Home?
Outside work, from the employee’s viewpoint, may be a critical source of revenue for their family. Employees choose to work several jobs for a variety of reasons, including additional money, on-the-job training, establishing entrepreneurial chances, and so on.
What If I Told You…
The most common reasons for employees to augment their income. 50 percent keep up with rising living costs 16 percent Changed family circumstances 14 percent wanted to pursue a different job 8 percent There is no compelling explanation. 6 percentage points Costs of healthcare have risen by 3%. The remaining 2% Costs of continuing education tuition
(Image courtesy of Indeed.com)
Not everyone who works a second job does so full-time. Many people work two part-time jobs, necessitating the necessity for several occupations. Others have sporadic employment possibilities with one job and want a more steady, backup job that pays consistently.
What Should Your Moonlighting Policy Contain?
There are a lot of aspects that you want to include in your policy, as you can see in the outside employment policy template included with this post. Here’s a list of characteristics to include in your company’s policy:
- Define “outside employment” in the context of the company: The first step is to establish what your organization considers to be secondary, outside, or moonlighting work. This definition will serve as the foundation for the rest of the policy.
- Add a general hindrance clause: This major statement should outline the policy as a whole, emphasizing the fact that workers may not participate in any outside occupation or business that might impede or impair their performance on the job.
- Request notifications of outside employment: Many companies that allow outside work will need employees to tell them when they find a second job. This enables the corporation to do due diligence using their own techniques of observation rather than relying just on the employees’.
- Address affected personnel: While the policy should affect all employees equally, if there is a particular job class or type that the policy affects, mention them by name in the policy (for example, customer service agents may be heavily impacted while your IT technicians may not be).
- Mention any conflicts of interest or encumbrances: Obviously, your organization does not want its workers working part-time for a rival. Explain what this means to your company and provide examples (particularly if there is one or two specific competitors that are forbidden).
- Clarify your position on secondary work on company property: Outside employment may often relate to selling merchandise (remember Avon?) or other handmade goods and products at work, such as in lunchrooms, parking lots, or other work places. If this activity isn’t allowed, please sure to mention it.
- Specify how business resources will be used: In virtually all circumstances, employers do not want workers to utilize company resources for outside work. Clearly state this in the policy.
- Define public representation: It is often bad to enable someone who works for you to be a public face for another firm if you have workers who work second jobs. It’s a good idea to lay out the dos and don’ts in this area when it comes to advertising, marketing, branding, and so on.
- Explain the right of refusal: While denying workers outside of work is a fool’s errand (since you can’t stop them from doing anything while they’re “off the clock”), employers may ban employees from working for rivals, vendors, suppliers, particular clients, and so on. It is critical to emphasize the freedom to refuse.
- Declare the ramifications of breaching the policy: Your organization must specify the ramifications of violating this policy. If there is a chance of termination of employment, it should be included in the policy.
When Considering an Outside Employment Policy, Follow These Best Practices
If your organization decides that an outside employment policy is necessary, it’s best not to concentrate on controlling workers’ time or behavior outside of the office, as we’ve suggested. Instead, any policy addressing outside employment should concentrate on the issue of “non-interference with the company,” as some employment law consultants refer to it. This language refers to workers’ unrestricted capacity and desire to show up for their planned work shifts, complete job-related obligations, and maintain professional behaviors required by the employer on a constant basis, regardless of other activities.
In addition, the following are some important “best practice” techniques to think about while designing your outside employment policy:
- Concentrate on the employee’s job: As previously said, do not try to dictate what the employee may and cannot do when away from work. Rather, concentrate on what constitutes a good employer-employee relationship. For instance, arriving on time and prepared to work, not missing planned shifts, performing as anticipated, behaving professionally, and so on.
- Create a transparent policy that everyone understands: Ascertain that your policy does not have a detrimental effect on your lower-income employees (who are the ones who most often have more than a single job).
- Make a note of any safety concerns: When it comes down to it, having a policy that incorporates workplace safety in all of its forms is a best practice attribute. Being exhausted, low-energy, anxious, and distracted are all common side effects of working several jobs, and employers are well aware of this. Nobody wants an employee that is fatigued and preoccupied when they arrive at work.
- Employees should be given alternatives rather than limitations: A really progressive policy will aid workers in their personal life while also safeguarding the company. Offering a practice of flexible or consistent scheduling, for example, so that workers may balance work shifts with outside job options.
Aspects of Outside Employment Policies that are Legal
Although you can make your own guidelines for outside work, you should be aware of federal and state legislation that may have an influence on your moonlighting policy.
Is it Possible to Be Fired for Working Outside the Company?
We want to emphasize that attempting to prevent your staff from working outside the company is not a good idea. It is not only legally defective, but it is also a policy that will never be completely implemented.
Regardless of the topic of a policy in your handbook, do not include it as a corporate requirement if you cannot properly implement it. Aside from potentially causing a schism between you and your staff, you’re also exposing your firm to legal risks. Because you will only ever know about the moonlighting activities of certain workers and not others, you will almost certainly apply the policy inconsistently. While in work, it is preferable to concentrate on the employee’s expectations.
As previously said, workers are free to do anything they choose outside of work, whether connected to their job or not, and employers may have the right to terminate employment if an employee is causing damage to the firm, executing job tasks improperly, or behaving in an unprofessional manner.
The following are the three most prevalent problems that workers face while moonlighting with a second job:
- A conflict of interest exists because of outside employment-related activity.
- Work connected to outside employment takes place during the workday and/or on business property.
- Outside employment-related work ultimately has an influence on the employee’s ability to accomplish their core job responsibilities or resulting in unprofessional conduct.
Laws governing employment outside of the state
California, Colorado, and North Dakota are among the states that have legislation safeguarding workers’ outside employment rights. Employers are prohibited from retaliating against workers for participating in authorized activities on non-work hours in these states (again, this is contingent upon the fact that employees are performing normally at the workplace).
The Bureau of Labor Statistics tracks where the most people work several jobs.
Reporting by Employers
Employers have the right to enquire about the employee’s connections outside of work. That is, who they work for, what their responsibilities are, and so on. The following questions are generally safe (legal) to ask and may assist you, the employer, in learning more about the employee’s outside job activities:
- Employer’s name, as well as current DBAs
- Address of the Employer
- The following is a general description of the outside employment relationship (is the employee working consistently, seasonally, as needed, occasionally, and so on)
- Type of job done outside of the workplace
- Required or recommended licenses and certifications (this is to ensure that the primary employer is not paying for licenses or certifications that the employee is financially benefiting from elsewhere)
Each of these inquiries may be readily justified by a need to know about any potential confidentiality or conflict of interest problems, industry rivals, or a firm name or brand with recognized (recent or present) media or public legal troubles.
Rather than a Moonlighting Policy,
Employers, at the end of the day, want to be protected. Employees must be protected from any outside activities, of any sort, that might result in injury, breach of confidentiality, conflict of interest, or, most typically, poor or deteriorating job performance or unprofessional conduct while at work.
Some argue that businesses don’t require an outside work policy since most well-designed employee handbooks already contain provisions for confidentiality, conflict of interest, acceptable job performance, and progressive punishment. People who believe this way aren’t completely wrong. An outside employment policy allows the employer (you) to collaborate with the employee while also defining limits before issues develop. This enables the employee to supplement their family’s income, create a side company, or profit from a pastime, while the employer receives a clear set of ground rules and the authority to enforce them if necessary.
Conclusion
The prudent way to helping manage your workplace with people who are energetic and ready to work, regardless of what their activities outside of the job happen to be, is to have created and declared a moonlighting policy before you need one. A well-written policy will eliminate ambiguity and will enable both the employee and the employer to turn to it if they have questions or concerns.
The “outside employment example” is a template that can be used for the moonlighting policy. The template includes information about outside employment, benefits and restrictions.
Frequently Asked Questions
How do you stop employees from moonlighting?
A: There are a few ways to stop employees from moonlighting. The first is by offering them the chance to work more hours during their regular work day, so they can still catch up on sleep when necessary. Another option would be creating policies and rules that strictly prohibit any sort of outside employment for company employees in order to avoid conflicts of interest between ones job with the company and another source of income.
What is a moonlighting policy?
A: A moonlighting policy is a work contract where the employee agrees to provide their services outside of regular working hours.
Do you need to inform an employer if youre moonlighting?
A: Yes, I recommend you inform your employer that you are moonlighting.
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