Moonlighting in the IT sector - ethical or not?

Moonlighting is a term that has recently caught traction in India. Employees of IT sector lately after pandemic have been involved in second employment which is affecting the productivity at primary work and is a cause of concern for IT giants of India. Companies have also issued a warning to their employees against moonlighting due to the risk of disclosure of confidential information about the company.

Due to unprecedented disruption brought forward by Covid pandemic, most of the industries had to embrace the work from home to ensure timely delivery of projects and safety concern of employees. IT Industry is the most beneficial sector of work from home (WFH) with majority of their workforce working remotely. With remote working on the rise, IT professionals have been taking up further assignments apart from their primary job for additional monetary benefits.

What is moonlighting?

The practice of working for one organization while also taking up extra responsibilities and jobs for other organizations, typically without the employer's knowledge, is referred to as moonlighting. It was coined as employment which is typically performed at night or on the weekends. The phrase originated when Americans began looking for second jobs in addition to their regular 9-to-5 jobs to supplement their income.

Moonlighting has raised an ethical dilemma about the future of the gig economy and changing nature of white-collar jobs in India especially in IT sector. Companies are having conflicting opinions as few consider moonlighting as cheating whereas others consider it a need of the hour with proper disclosure to their primary jobs.

Why moonlighting is in buzz?

The working model of WFH is said to have promulgated moonlighting among the white-collar professionals in India. It has also challenged the compliance issues within companies.

Further due to high inflation, increased cost of living post Covid, low income at entry level, poor job satisfaction and ever-growing demand for WFH employees in IT sector, more employees are looking forward for additional income stream with taking second employment.

According to a TOI report, a survey called Kotak Institutional Equities (July) was conducted on 400 people across the IT&ITES space and found that "65 per cent knew of people pursuing part-time opportunities or moonlighting while working from home."

This has become a major reason why people are preferring work from home mode and interestingly 42 per cent of the participants preferred to change their jobs or even quit if they were not allowed to WFH.

Is moonlighting ethical?

Companies are having conflicting opinions as few consider moonlighting as cheating whereas others consider it a need of the hour with proper disclosure to their primary employers while permitting employees for the same.

A chairman for one of the leading IT giants has stated that it is cheating - plain and simple whereas a former director of biggest Banking technology service providers does not consider moonlighting "cheating". He states that employment is a contract between employees and employer for renumeration against working for 'n' hours a day. Post that the employees can do what they want. It's also stated that is 'not rampant' and in addition to that, the organisation should probably 'make a policy' to allow workers to openly pursue multiple jobs at once, after informing the company.

CEO of one of another IT giant, also described it as an 'ethical issue,' stating that employees lose out on long run by focusing on short term gains. Very recently, Wipro has fired 300 employees for doing working under moonlighting concept. On the other hand in one of the survey conducted by Mint 65 per cent responded has considered moonlighting as ethical whereas 23 per cent were considered as unethical.

Is moonlighting legal in India?

Overemployment, which is called dual employment in India, is technically permissible in the US and the UK from a tax perspective. In UK, a second employment, could alter a worker's tax status, however, it will not reflect in payroll at the first employer and will go unnoticed in larger organisations. The US tax system is simpler since it is built on the idea of self-assessment and voluntary reporting.

A person may work more than one job in India without breaking the law. However, a person with a similar set of jobs could give rise to concerns about a violation of confidentiality clause because many employers include such restrictions in their employment agreements in addition to prohibitions against holding down multiple jobs. With additional income, more taxes need to be paid by the individuals which in turn will be beneficial to the government.

No clear verdict?

Companies are worried about the loss of productivity at the primary job as moonlighting leads to overwork and burnout of the employee. It will further affect the productivity of the employees and risk of disclosing critical information. They also have a problem that employees using company materials like laptops or software for their additional jobs. In full-time employment, the employee is expected and required to spend his entire working time, efforts and energy for the employer's interests.

It is noteworthy that there is no overarching law against moonlighting, but individual companies are specific in their employment agreement restricting their employees towards enrolment for separate jobs which can affect their primary job. However, recent surge in moonlighting shows the companies should revisit the employment agreement and incorporate these rules in line with their policies.

Some of the industry leaders are of the view that moonlighting is beneficial as it can significantly contribute to both professional and personal development of the individual as they get varied experience by working on multiple types of assignments. With proper code of conducts and policies in place, moonlighting may be considered as 'future of work' as some says. It appears that answer will depend on who is responding to the question, is it the employees or the employer.

(The author is Chief Technology Officer, Union Bank of India. The content or opinion expressed in the article are of the Author in his/her individual capacity and does not represent the Bank's view, in any manner)