Moonlighting Policy Template

As flexible work arrangements and side hustles become increasingly common, employers are rethinking how they approach “moonlighting” — or, more plainly, working a second job. Whether it’s freelancing, running a small business, or taking on part-time work in another industry, many employees engage in outside employment to pursue personal passions or supplement their income.

While moonlighting can have personal and professional benefits, it can also pose risks — from conflicts of interest to burnout to misuse of company resources. A thoughtful moonlighting policy helps establish clear boundaries and expectations, protects company interests, and supports transparency and trust between employees and their employers.

What a Moonlighting Policy Should Include

An effective moonlighting policy should clearly outline:

• Definition of moonlighting: What qualifies as outside employment or freelance work
• Eligibility and scope: Which employees the policy applies to and any job-level considerations (e.g., restrictions for senior leadership or sensitive roles)
• Permissible and prohibited activities: What types of outside work are acceptable and what types present a conflict of interest or other risk
• Disclosure and approval process: Whether employees must notify or obtain approval for outside work and how to do so
• Conflict of interest provisions: Guidelines for identifying and avoiding activities that compete with or interfere with the employee’s current role
• Use of company resources: Restrictions on using company time, tools, or confidential information for outside work
• Performance expectations: Reinforcement that primary job responsibilities must remain unaffected
• Consequences for violation: Possible disciplinary actions for noncompliance
• Review and updates: How often the policy will be reviewed and updated, and how changes will be communicated

Purpose of the Policy

The purpose of a moonlighting policy is to:

• Protect company interests, including intellectual property, client relationships, and confidential information
• Ensure employees can take on outside work without negatively impacting their performance or the organization
• Provide clarity around what types of outside employment are permissible
• Promote ethical behavior and transparency
• Support a healthy work-life balance and help prevent overwork or burnout

Moonlighting Policy Template

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1. Overview

We recognize that employees may choose to pursue outside employment or freelance work in addition to their role with our company. While we support personal and professional growth, outside work must not interfere with job performance, create a conflict of interest, or misuse company resources.

This policy outlines the guidelines for engaging in outside employment, often referred to as "moonlighting."

2. Scope and Applicability

This policy applies to all full-time and part-time employees, including exempt and non-exempt roles. Certain departments or positions (such as leadership or roles involving access to confidential data or clients) may be subject to additional restrictions.

Contractors, interns, and temporary workers may be subject to separate agreements that govern outside work.

3. Definition of Moonlighting

Moonlighting refers to any paid or unpaid work performed for another employer, client, or personal business outside of the employee’s responsibilities with this company. This includes, but is not limited to:

• Freelancing or consulting
• Operating a business
• Working part-time for another organization
• Selling products or services online
• Teaching, coaching, or public speaking for compensation

Volunteer work is not considered moonlighting unless it presents a conflict of interest or interferes with job performance.

4. Permitted Activities

Outside employment is generally permitted under the following conditions:

• It does not create a conflict of interest or compete with the company’s business
• It is performed outside of regular working hours
• It does not interfere with the employee’s job performance or availability
• It does not involve use of company resources, tools, proprietary information, or time
• It complies with all applicable company policies, including confidentiality and code of conduct

Employees must continue to meet all job performance expectations and adhere to their assigned work schedules.

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5. Prohibited Activities

Employees may not engage in outside work that:

• Directly competes with the company or its clients
• Involves working for a current or prospective competitor, customer, or vendor
• Creates a conflict of interest or the appearance of one
• Uses or discloses company confidential or proprietary information
• Is conducted using company equipment, software, or email accounts
• Occurs during scheduled working hours or interferes with availability
• Violates any laws, professional codes, or licensing standards

6. Disclosure and Approval Process

Employees who wish to engage in outside employment must disclose their intention in writing to their manager and/or HR before beginning such work. The disclosure should include:

• A description of the outside work
• Name of the external employer or business (if applicable)
• Estimated hours per week and schedule
• Confirmation that there is no conflict of interest

HR will review the request and notify the employee if additional documentation or approval is needed. Approval may be withheld or revoked if the outside work presents a conflict, affects performance, or violates this policy.

Employees are responsible for promptly updating HR if the nature or scope of their outside work changes.

7. Use of Company Resources

Employees are strictly prohibited from using any company resources — including time, equipment, tools, software, email, or workspace — for outside employment. All outside work must be performed using personal devices and conducted outside of regular work hours.

8. Confidentiality and Intellectual Property

Employees must adhere to all confidentiality, data protection, and intellectual property agreements while engaging in outside work. Any inventions, content, or work product created using company resources or within the scope of an employee’s role may be considered company property.

Employees may not use company trade secrets, internal knowledge, or strategic plans for the benefit of external clients or businesses.

9. Performance Expectations

Employees engaging in outside employment are expected to maintain satisfactory performance in their primary roles. If outside work negatively affects an employee’s productivity, quality of work, attendance, or focus, the company may require the employee to modify or end the outside work arrangement.

10. Violations and Consequences

Failure to comply with this policy may result in disciplinary action, up to and including termination of employment. Examples of violations include:

• Engaging in undisclosed outside work
• Using company resources for outside employment
• Failing to meet job performance standards due to external commitments
• Violating confidentiality agreements or intellectual property rights

All concerns will be handled promptly and fairly in accordance with the company’s disciplinary procedures.

11. Policy Review and Updates

This policy will be reviewed regularly and updated as needed. Employees will be notified of any changes. Questions about this policy or the approval process can be directed to:

[Insert HR contact name]
[Insert email address]
[Insert phone number]

Frequently Asked Questions

1. Do I need to get approval for a small side gig like selling crafts online?
If the work is unrelated to our business and doesn’t conflict with your job responsibilities, formal approval may not be required — but we encourage disclosure to avoid any confusion.

2. Can I freelance on evenings or weekends?
Yes, as long as the work doesn’t create a conflict of interest, use company resources, or affect your performance.

3. What happens if I start moonlighting without telling HR?
You may be in violation of this policy. Even if the work is harmless, failing to disclose it can lead to disciplinary action.

4. Does volunteer work count as moonlighting?
Generally no, unless the volunteer work competes with the company, uses work hours or resources, or interferes with job duties.

5. Can I work for a former employer while still employed here?
It depends on the nature of the work and whether it poses a conflict of interest. Disclosure and review are required before proceeding.

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