Moonlighting: How to Deal with Employees’ Second Jobs (4/11)

Second, and even third, jobs are a fact of today’s work life, so you need to be prepared to cope with employees’ split allegiances.  Find out five ways to help balance an employee’s outside employment with your organization’s performance expectations.

The issue of outside employment is a challenge for many organizations.  On one side, you may be concerned that “moonlighting” will lead to divided allegiances, conflicts of interest, and poor job performance.  However, employers also recognize that employees take second jobs for many legitimate reasons, including the need for extra income and the desire to learn new skills.  Further, most employers cannot, and do not want to, control their employees’ off-duty activities.  In addition, both employers and employees are embracing new relationships that include the use of part-time and temporary workers and innovations such as job sharing and telecommuting.  As a result, workers with multiple jobs are a growing segment of the market, and attitudes toward outside employment and strict loyalty to one employer are changing. Why Employees Take Second Jobs The Bureau of Labor Statistics reports that in 2009, 7.3 million workers held more than one job and the multiple jobholding rate was 5.2% of the working population.  As an employer, then, you should understand the motivations for secondary employment.  People generally take extra jobs for several reasons: 1.     To meet current expenses or pay off debt.  Financial problems may be temporary, such as when an employee’s spouse is between jobs, and the employee only needs a second job on a short-term basis.  Or, the problems can be ongoing because the employee’s salary is too low or does not keep pace with inflation, or the employee is overextended.  In these cases, the employee often commits to a second job for an extended or indefinite period. 2.     To earn extra money.  Some employees may be working an extra job to earn additional cash for a particular purchase, such as a home or car.  These jobs tend to be temporary until the goal is met. 3.     To gain further work experience.  Some employees want to acquire new skills that they cannot get in their present job.  Others use second jobs to explore career changes. 4.     To balance work and outside obligations.  A few employees work multiple part-time jobs, as opposed to a single full-time one, to allow more flexibility for personal obligations such as child and elder care or to pursue recreational interests. Determining the Need for a Policy Most HR experts point out that the purposes behind a moonlighting policy are important and should be communicated.  Typically, this policy should explain the employer’s performance expectations, warn against conflicts of interest and remind of confidentiality and noncompete requirements.  At the same time, however, some experts think that a separate policy focusing on employees’ off-duty activities can create an atmosphere of mistrust.        Proponents of a separate policy counter this argument by emphasizing that a well-written policy can reinforce the employer’s position and make employees consider more carefully the possible strains a second job can create.  Outside employment policies often are used by organizations that have numerous employees who work second jobs and by those that do not have separate conflict of interest of confidentiality policies. Legal Aspects of Outside Employment Policies You also should consider the potential legal issues that can arise from regulating outside employment.  As a general rule, courts have determined that private employers may prohibit employees from moonlighting and may terminate employees for doing so, unless there is an agreement otherwise.  However, a few states, including Colorado and New York, have enacted statutes that restrict organizations from making employment decisions based on an employee’s lawful off-duty conduct, which could include second jobs.  These statutes generally allow employers to prohibit second jobs only when that employment creates a conflict of interest with the worker’s duties to the employer.      For example, Colorado prohibits termination based on any legal off-duty conduct unless the restriction is related to a bona fide occupational requirement, is reasonably related to the employment activities of an employee or group of employees, or is necessary to prevent an actual or apparent conflict of interest.  And, New York prohibits employers from discriminating against employees for using any legal product, like tobacco or alcohol, while off-duty and off the premises; engaging in legal political or recreational activity while off-duty and off the premises; or belonging to a union.   Accordingly, you should consult with legal counsel to determine if state restrictions apply.      The ability of public employers to restrict outside employment is more limited than for the private sector.  For the most part, public employers must show the need to prevent actual or apparent conflicts of interest.  However, they generally may require prior approval of any outside employment. Five Points to Address Concerning Outside Employment Whether you decide to have a separate moonlighting policy or incorporate the issues into existing policies, you should take into account both your concern to prevent conflicts and the employee’s need or desire to work.  By doing so, you can strike a fair balance and develop legally sound policies that address everyone’s interests.  To help achieve this balance, the policy should include the following five provisions: 1.     A requirement that employees inform you of any outside employment.  In addition, they should be required to obtain prior permission before pursuing the activity. 2.     A review process for requests and specific criteria for approval.  Request from higher-level and exempt employees may be evaluated using more stringent criteria than requests from others.    A single person or department should be responsible for the final decision. 3.     A statement prohibiting behaviors that negatively impact the employer.  In particular, you should prohibit competition with the employer; the performance or solicitation of outside business during paid working time; the use of the employer’s tools or equipment for outside work; any work activity that would adversely affect the employer’s image; and the use of certain paid absences for outside employment.  The policy also should discourage any work activity that affects the employee’s job performance, punctuality, loyalty, and ability to fulfill other responsibilities of the primary job.  (See also   # 5, below.) 4.     A provision addressing outside employment when an employee is on a leave of absence, such as leave under the Family and Medical Leave Act (FMLA).  Many employers prohibit employees from self employment or working a second job while on a leave of absence, with the exception of public service or military leaves.  Others allow employees to work in pre-approved second jobs during an FMLA leave as long as their reason for leave does not preclude the outside employment.  For example, an employee on FMLA leave to care for a seriously ill family member during the normal work day is still able to work a second job during the evening hours, but an employee on leave for his own serious health condition may not be able to perform a second job.  The FMLA allows you to apply a policy restricting outside employment to employees who take FMLA leave as long as the policy is applied uniformly.  However, if you do not prohibit outside employment during FMLA, you cannot deny the employee any FMLA benefits if an employee continues working at a second job while taking FMLA leave from his primary job.  5.     A reminder regarding disciplinary action if the outside work causes or contributes to job-related problems.  As an alternative to strict regulation of off-duty conduct, you should reinforce your intent to address on a continuing basis specific job performance or conflict-of-interest problems related to secondary employment.