Are Your Employees Two-Timing You?

employee moonlighting

Do you suspect that one of your employees is moonlighting or working another job on the side — and that it’s starting to affect the quality of their work at your business?

If you haven’t already run into this employee moonlighting conundrum, you’re more likely to in the coming years. According to a recent survey for Indeed, in 2015 over one-third of people with full-time jobs did some kind of work on the side, despite an improving economy and higher employment rate.

Apparently, many employees aren’t seeing the results of this good news. Almost two-thirds of employees in the survey say their wages were flat last year, and the majority (over 50 percent) of employees with multiple jobs say they took their second jobs to keep pace with the cost of living. What’s more, nearly 90 percent of those with more than one job say they will continue doing double-duty this year.

What can you do if you’re in this employee moonlighting situation?

First, keep in mind that a contractor or freelancer is perfectly within his or her rights to work for as many employers as possible. In fact, it’s better (for legal purposes) if they do. However, if they’re not living up to the terms of your contract with them, you’re within your rights to terminate the contract.

If an actual employee is functioning under par and you think it’s due to a second job, the issue is a little more complicated. Does your employee handbook or employment contract prohibit workers from having two jobs? Probably not. Few employers want to interfere with their employees’ off-duty activities.

However, if the second job means the employee can’t meet the requirements of their job at your company, that’s a different issue. For example, if your employee handbook states that work hours are 8 to 5, and you discover that a worker is regularly leaving at 4:30 to rush to his other job, that is cause for disciplinary action.

Your employee handbook or employment contract is more likely to prohibit working for a competitor, competing with your business by starting a new business, or disclosing your company’s trade secrets or sensitive information. Breaking these terms is also cause for disciplinary action — and can have far more serious ramifications than just being a poor-performing employee.

Of course, you may not want to fire the employee — you’ll likely just want to get his performance back up to snuff. In this case, it’s best to start by focusing on performance issues. Meet with the employee and bring up specific problems you’ve noticed, such as frequent tardiness, absenteeism or a decline in quality of work. At this point, many employees may admit to the side job; if not, probe a little further to see what they are willing to share.

If the job or moonlighting project is violating terms such as non-compete or nondisclosure clauses, or making it impossible for an employee to fill the role at your company because of conflicting hours, clearly explain the problem. (Many employees may not even remember that they signed a non-compete clause way back when they were hired.) If the outside work isn’t violating any agreements, however, you’ll need to focus on the performance issues.

One way to deal with this is to find out why the person is working two jobs or moonlighting. Is it for financial reasons? If warranted, you can emphasize that by putting that same time and effort into their job with you, the employee would eventually get a raise. Perhaps you can even set up performance goals that would earn the person a bonus. (Of course, make sure this is realistic before you offer, and be willing to apply it to all of your employees, or you may find a rash of moonlighters.)

If the employee is working outside your company to learn additional skills or get experience, find out exactly what he or she wants to gain. Can you offer him or her more responsibility at your business that would satisfy this need?

Before you bring up employee moonlighting concerns with an employee, be sure you’re prepared for the worst. The person may choose the other job instead of your business.

Always have a backup plan in place for how you’ll deal with a sudden exit if it comes to that.

Always consult applicable employment laws in your state before conducting any disciplinary action toward an employee.

Image: Indeed 3 Comments ▼

Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

3 Reactions
  1. While this may be an uncomfortable discussion to have, communicating clearly is the key. Provide an environment where the employee can be honest about what they’re doing and give context around why. Explain how you think it is affecting performance. Find a solution that resolves the performance issue.

    • I think it is okay as long as the performance is on point. As long as the outputs are done well and on time, then that person can work whatever other job he has.

  2. In most cases, this is not something you should be alarmed. With today’s economic price inflation and employers mobilizing its business in the virtual world, it’s pretty reasonable to find another extra job as long as you the employee gets the job done on your company.