Big Overtime Changes Will Shine a Light on Your Moonlighting Policy

One of the unintended consequences of the big changes coming to federal overtime law coming this summer is likely to be more employees taking on second jobs, according to a new study by George Mason University.

The U.S. Department of Labor is expected to more than double the salary threshold for exempt employees (currently at $23,660). In response, some employers will reduce base salaries or reduce hours for certain employees.

Some employers will, for the first time, have to deal with setting policies on whether employees can take second What's your policy on moonlighting?jobs—and whether workers must notify managers. About 5% of U.S. employees hold second jobs.

You have a right to prohibit employees from engaging in other gainful employment while at work. But can you (or should you) ban off-the-clock moonlighting?

4 rules for a company moonlighting policy

Some employers have no problem, in general, with employees who moonlight, but still want some restrictions. That’s why it’s wise to set a clear policy that outlines what you consider acceptable outside employment. Here are some tips for setting a policy:

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1. Avoid blanket anti-moonlighting policies. If you need to protect trade secrets, ban outside work for competitors or require employees to get prior approval for second jobs. Have employees sign noncompete agreements.

2. Check state laws and get legal advice on anti-moonlighting policies.

3. Apply your moonlighting policy equally to all staff. And be equitable about how you hand out punishment for those who break the rules. Otherwise, you risk a discrimination lawsuit. Also, specify in your policy whether employees can moonlight during leave. If you’re silent on the issue, employees may be able to moonlight while they’re out on FMLA leave.

4. Thoroughly investigate all violations of the policy. You shouldn’t fire or discipline an employee merely because you suspect him or her of behavior that’s unbecoming or in conflict with your interests. Find out exactly what’s happening before you act.


Employee Moonlighting: Sample Policies


The following sample policies were excerpted from The Book of Company Policies, published by HR Specialist and Business Management Daily.


Sample Policy 1:

“An employee may hold a job with another organization as long as he or she satisfactorily performs his or her job responsibilities with XYZ. All employees will be judged by the same performance standards and will be subject to XYZ’s scheduling demands, regardless of any existing outside work requirements.

“If the Company determines that an employee’s outside work interferes with performance or the ability to meet the requirements of XYZ as they are modified from time to time, the employee may be asked to terminate the outside employment if he or she wishes to remain with XYZ.

“Outside employment will present a conflict of interest if it has an adverse impact on XYZ.”

Sample Policy 2:

“On occasion, employees of XYZ may decide to seek employment outside their regular working hours. The company has no objection to this type of work when it does not interfere with employee performance or attendance at XYZ and when he or she is not in the employ of a vendor, client or competitor so as to create a conflict of interest in employment.

“All employees engaged in outside employment must immediately inform their supervisors in writing. Failure to disclose or misrepresent outside employment may result in disciplinary action, up to and including termination.

“All employees will be judged by the same performance standards and will be subject to XYZ’s scheduling demands, regardless of any existing outside work requirements.”


Online resource You can find these policies, plus a list of questions and issues to consider when drafting your organization’s own moonlighting policy, at