Moonlighting by Employees in IT/ITes Companies
Moonlighting by employees in an IT company can be a tricky issue. People are often confused and unsure about the legal implications of this activity; what is the moonlighting clause or the repercussions for both the employee and the company? Although there are no laws prohibiting employee moonlighting in India, many companies prohibit employees from moonlighting by placing restrictions clause in Employment Agreements.
While moonlighting in India isn’t illegal, it can affect productivity. It may also be a breach of your employment contract. The financial impact of decreased productivity and performance is clear. While moonlighting can be tempting and have a positive effect on the bottom line, it can also negatively impact an employee’s health and overall productivity.
Let’s discuss moonlighting by employees in India in detail:
Legality of Moonlighting
An important question is whether moonlighting should be illegal. While some employers may see moonlighting as an opportunity for their employees to earn more or upgrade their skills, others may find it unethical and deceitful. While the practice of moonlighting in India is widespread, it has risks, such as a breach of trust, conflict of interest, circumvention of company’s business, poaching etc.. For this reason, some companies prohibit employees from working for other companies.
The ethical question of employee moonlighting has a lot of ramifications for employers and employees alike. For one thing, employees are often underpaid and underutilized, which results in them working side jobs. Although employees are legal to work in more than one job, many find moonlighting in ethics inappropriate. Connect with us to learn more about an essential moonlighting clause that can help you deal with moonlighting by employees in your company.
Mixed Reactions Towards Moonlighting in India
Some employers are more flexible than others regarding moonlighting by employees, which is a common practice in the tech industry. However, some traditional tech firms still have concerns about the practice, even though it has become the norm. In IT companies, moonlighting is not always permitted. Although it is not illegal, some employers may not appreciate it. An employee should check with their company policy before getting involved in moonlighting.
Employers have various legal options when it comes to moonlighting by employees, but it is crucial to know the limitations of such policies. Although some companies have strict guidelines against moonlighting, others have no rules. If you suspect your employee of moonlighting, it is crucial to gather the evidence before deciding how to handle the situation or get in touch with Cyberra Legal Services for professional guidance on crucial issues like moonlighting.
Impact on Primary Employers
Moonlighting by employees can harm their employers. For example, an employee who takes on a second job might not be able to devote full attention to their primary job, which may result in performance issues. Employees who moonlight may not fully commit to their primary job and may experience fatigue, poor attention, and tardiness. It also might lead to the loss of benefits if an employee is injured while working at another job. Other risks for companies include breach of trust, conflict of interest, poaching of clients, poaching of suppliers, poaching of employees, misuse of company’s confidential data etc.
Moonlighting in ethics is not acceptable to many employers. While some employers don’t consider moonlighting a significant risk, management should be on guard if an employee moonlight. The risks to an employer include a potential employee from working for a competitor, data leaks, and decreased productivity. If an employee is consistently moonlighting, their primary employer is legally entitled to terminate them.
Repercussions on Employee
Moonlighting in ethics is not appreciated. Employees who moonlight often breach the company’s non-compete, non-poaching, non-disclosure, non-circumvent and single-employer agreements. These employees often don’t perform as well at their primary jobs. They may also be distracted, sleeping on the job, or using company resources for their second jobs. Using company’s IT resources for their second jobs shall amount to cyber crime of unauthorized access as per Indian I.T.Act,2000. Moreover, this behavior negatively affects their physical and psychological health in the long run.
Employees who moonlight may face challenges with a performance at primary jobs. They may also have to perform additional tasks to get paid for their second jobs. However, it’s essential to remember that it can be time-consuming and frustrating. Employees who moonlight often compromise their performance and relationships with family and friends. It may also affect the relationship with their spouse.
How Moonlighting Evolved Over Time
Moonlighting by employees has been around for centuries. However, recent times have witnessed a sudden rise in moonlighting, especially during and after the Covid situation. The work-from-home model has promoted moonlighting among white-collar professionals in India and has posed challenges for compliance issues in companies. Some IT companies even allow employees to moonlight, but only under certain conditions.
Another factor contributing to the moonlighting trend is the rise of crowdsourcing platforms, which offer short-term project-based services. While some may see this as a good thing for the tech industry, others believe it is detrimental to the business. It is vital to understand the legalities involved and which moonlighting clause can help the company protect its interest. Get in touch with the techno-legal advisors at Cyberra Legal Services to know more about moonlighting in India and how we can help you deal with it.
Many IT workers now moonlight, and many companies are unaware of this. The rise of the gig economy, the rising startup ecosystem, and the work-from-home-operating model have all contributed to the increase in moonlighting by employees. Get professional help from Cyberra Legal Services regarding your company legal and information security policies and get rid of moonlighting practices at your company.
The first step is establishing clear policies and guidelines about moonlighting. While employees may want to pursue their side jobs to improve their performance and income, employers may want to be careful about their approach. An employer can prohibit an employee from moonlighting if they deem it harmful to the company’s business interests or morals.
Below are some of the most common Frequently Asked Questions:
Q1. What is moonlighting in the IT industry?
– Moonlighting refers to taking up other jobs while working with an organization. It can be full-time employment, part-time job, or freelancing work along with the primary job.
Q2. Is moonlighting allowed in India?
– The Indian Factories Act has a vague approach toward moonlighting. However, some companies have clauses against moonlighting or double employment in their employment agreement.
Q3. Can a person be employed in 2 companies in India?
– Although there is no such specific legislation in India to stop dual employment, employers can stop their employees from having two jobs by having particular policies in their employment agreements.
Q4. How to deal with employee moonlighting?
– While talking to the employee who has been moonlighting may work, including a specific moonlighting clause in your employment agreement can prevent your employees from taking up another job.