Moonlighting Policy: Navigating the Grey Area

Authors: Zarana Samanta and Sharmishtha Zode are second-year law students at the Institute of Law, Nirma University, Ahmedabad. 

Moonlighting Policy is an emerging term in the Indian context. This blog aims to discuss at Moonlighting Policy and the legal lacuna that exists in the Indian realm and hence the essential insights for the same can be illuminated for a way forward.


The condition of the Indian economy is such that many employees have to resort to moonlighting. What is moonlighting? This blog attempts to understand the concerned term which explains a person taking up another job in the rival company apart from his primary job, without informing his employee after his regular employment working hours. This is a widely adopted practice in America and has originated in India particularly following the period of lockdown during the Coronavirus pandemic when people started having more time to spare as a result of the fresh concept of “work from home”. An example can be given of the United States of America where it recognizes the concept of ‘joint employment’ under its Fair Labour Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA) and it can be seen that their economy is flourishing.

There can be many reasons for people practicing moonlighting, but one of the most prominent reasons being that an additional amount of income is required as the primary source of income is not satisfactory. It might also be because of the workers’ intentions to pursue something in the furtherance of their own interests, passions, and creativity.

The laws in India regarding the policy are non-liquet, in the sense that there is no said legislation for the same.


It is no surprise that this policy can be subjected to the whims and fancies of different companies since there is a lacuna in the Indian legal system regarding any sort of moonlighting policy. Recently, Wipro fired 300 of its employees for moonlighting because they were found to be working for rival companies after their primary job work hours. However, the psychology of the workers who take up moonlighting has to be understood. Workers are forced to take up second jobs because salaries and wages are low and some form of extra income is needed for sustenance (even in mega cities where IT industries do not remunerate sufficiently).

Essentially, moonlighting can pose several harms to employers and employees, both. Employers are worried that the workers would divulge trade secrets and breach confidentiality by working for rival companies. Additionally, moonlighting can also harm the primary employer because the employee would be working more than one job with half the efficiency and productivity, and this in turn can harm the economy if not taken substantial care of. But, it is a complete oblivion to the fact that the pay-scale of the employees is so low that even after working long hours in the day, they have to work a night-shift to stretch to pay their bills. It is inspiring to learn that the startup Swiggy has permitted its workers to take up work outside their regular employment. This strong move comes with Swiggy understanding the needs of the employees to persuade their interests to reach a satisfactory economic level.

Dual Employment and Moonlighting

Considering that there is a gap in the law regarding moonlighting, it is a circumstance that the term ‘dual employment’ is at times confused with ‘moonlighting’. There are a few legislations which prohibit dual employment. Section 60 of The Factories Act, 1948 restricts double employment for factory labourers. This was similarly upheld in the case of Manubhai Gordhandas vs. Arvind Mills Company Ltd. Various Shops and Establishment Acts of different States provide for the same. For example, Section 65 of the Bombay Shops and Establishments Act, 1948 prohibits dual employment even on the days when the employee is on leave from his primary job.

The reasoning given behind there being a set legislation only for factory workers is that they engage in physically strenuous work. The same is not provided for IT industries because the work is not physically demanding. There should be a robust policy covering moonlighting for the other sectors as well which is supported by well-formed contracts.

Moonlighting Through a Probable Legal lens

Moonlighting can be brought under the ambit of Article 19(1)(g) of the Constitution as a fundamental freedom to practice any profession and occupation. If a worker is not infringing any ethical aspect of the nuanced contract, then moonlighting should fall under the scope of the fundamental right to practice any profession, business or trade with reasonable restrictions.  Likewise, it can also be argued that disallowing moonlighting can be an agreement in restraint of trade as per Section 27 of the Indian Contract Act, 1872. Inserting non-compete clauses are divided and moonlighting has to be studied in detail by the policymakers to solve the debate around the same ad they should be subject to reasonable restrictions. Workers working for non-rival companies should be included under this realm.

Hence, to gauge deeper into the issue of moonlighting, one needs to achieve a balance between the employers and the employees so that disputes in a vacuum do not arise.


Government intervention via legislation is the paramount need of the hour. Moonlighting should be encouraged by resilient laws to have a well-defined system in place.

Nevertheless, to address the current situation, the companies should rely upon impeccable contracts so as to prevent or permit moonlighting as per their company policy in order to remove any ambiguity surrounding the question. Companies can take a two-way route; either allow moonlighting or forbid it. For forbidding moonlighting, the prohibition should only be to the extent of competing companies. The following are the ways that companies can prevent moonlighting:

  1. Take valuable feedback of the employees about their pay-scale and their satisfaction.
  2. Conduct a background check on their PF systems.
  3. Have a moonlighting clause and policy in employment contracts.
  4. Train employees and develop their existing skills to sharpen their efficiency.

With the Cost of Living rising and the simultaneous price hikes and inflation, there is an inevitable requirement for people to expand their source of income and therefore, the companies should either raise the salaries and wages (if they expect loyalty from the employees) or allow for moonlighting. To ensure loyalty, a non-solicitation clause should be entered to protect the employer’s confidentiality, so that trade secrets or confidential business matters are not divulged as was mentioned in Dr. Sudipta Banerjee vs. L.S Davar & Company.

If the companies cannot subscribe to any of the above-mentioned suggestions, then the appropriate means to achieve a consensus would be to frame contracts with well-defined clauses as per the individual needs of the company. These contracts should include clauses like a moonlighting clause, a non-poaching clause, a non-solicitation clause and a non-disclosure clause. However, it should be noted that these clauses are not exhaustive and the employer-employee can work out their own set of needs. All of this should be done keeping in mind that the individual does not work for a rival company.


There is no doubt that moonlighting boosts the economy, but it cannot be denied that it is happening at the cost of the productivity and efficiency of the worker. But, if a worker has a personal choice for moonlighting, then that should be allowed considering the financial stability reasons in India. Deliberating the ethical stance of moonlighting, it should be allowed with a non-compete confidential clause and should be informed to the primary employer. All of this should be expressly mentioned in the contract. But, if there is an express provision prohibiting moonlighting, then the employer should not go against it as that would be considered a fraud.

There must be laws regulating this sphere of dual employment / moonlighting in order to develop clarity among the working citizens and a proper legislative framework would be the most appropriate way to move forward. Although these solutions are broadly available and suggested, the major drawback still remains its implementation. With no regulations concerning moonlighting in the current arrangement, it becomes difficult to establish why the companies would be willing to spend to retain their current employees instead of employing new people who readily constitute the available workforce; because they have no incentive for the previous solution to spend in order to keep a track on moonlighting. This is a shortcoming that needs to be pondered upon in order to learn about their incentives for undertaking expenses for their workers.






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