Working a ‘side hustle’ is no longer unusual in this ‘golden age of entrepreneurialism.’ Particularly in a cost of living crisis, the appeal of working a side-gig is understandable. In fact, 1 in 12 people in the UK are now working a second job to earn more money. And although taking on another job isn’t illegal, depending on the terms of your employment contract there are some legal implications to be aware of. This article offers a broad overview of moonlighting: what it is, how it affects employers, and what to look out for in your employment contract.
What is moonlighting?
Moonlighting is when somebody works a job in addition to their main ‘day job’ – often without informing their employer. As we mentioned earlier, a combination of COVID-19, rising ‘entrepreneurialism’, the gig economy and the cost of living crisis have pushed more people to take up a ‘side hustle’ of some form.
Is moonlighting illegal?
There is no legislation that prohibits working a side gig or side hustle. So it is technically legal to work a second job. However, if your employment contract explicitly precludes ‘moonlighting’, then you may find yourself in breach.
Employers & moonlighting
‘Moonlighting’ can sometimes become problematic from an employer’s point of view. This is why they might choose to address it directly in their employment contract.
1. Minimised output & performance
Working a second job may impact an employee’s performance, engagement, and output at work. If someone is dedicating long-hours to their side-gig, it is very possible that their productivity at work will be negatively affected.
2. Legal liability
As per the ‘Working Time Directive’, employees cannot work more than an average of 48 hours a week. This also applies when employees work two jobs – the combined working hours cannot exceed the 48 hour limit. In this case, there are two options: the employee can sign an opt-out agreement or reduce their respective hours to meet the limit.
By signing an opt-out agreement, the employee would agree to exempt themselves from the 48 hour rule. Certain types of workers are not allowed to opt out, however, so ensure to check your eligibility.
3. Reputational concerns
There is also some risk of negative reputational impact on the business if the employee’s side hustle becomes controversial for some reason in the public sphere.
4. Conflicts of interest & competition
Employees working within the same industry or with direct competition could cause substantial damage to the employer’s own business. This is especially the case if the employee is drawing on their professional network or insider-knowledge.
5. Employee retention
Another concern for employers is the risk of employees leaving the business to pursue their side-hustle full time. Though, of course, employers can’t do anything to prevent an employee from leaving, this will be a concern in terms of their employee retention rates.
Moonlighting & your employment contract
Employment contracts don’t usually ban employees from working a second job. But they might include certain clauses that pertain to ‘moonlighting’:
This kind of clause prohibits working with direct competitors of the business or similar types of companies. If the employee breaches this clause, the employer has the right to terminate their contract.
2. Requirement to notify employer
Additionally, employers might require employees to notify them when and if they have decided to take on another job. This will ensure that the employer can take appropriate action, such as issuing an ‘opt-out agreement’, if it turns out the employee in question is exceeding their overall 48 working hour limit.
If an employee fails to properly notify their employer, this may lead to disciplinary action or even termination of the contract.
3. Prohibiting second jobs all together
Employers are at liberty to prohibit ‘moonlighting’ all together by including a relevant clause in their employment contract. Though this is usually only necessary in relation to top-level leadership positions whose whole time and commitment is required.
Moonlighting: from a legal perspective
If you’re an employee looking to work a second job or launch a side-hustle, it’s advisable to check your employment contract and speak to a legal expert to understand your position. Even if you’ve had a quick scan of your contract and can’t see any clauses that explicitly uses the words ‘moonlighting’ or ‘having a second job’, it’s still possible that there is one in there. And the last thing you want is to jeopardise your main job in favour of your second. That’s why having a legal expert review your contract for you is never a bad idea.
And if you’re an employer looking to manage your own interests with employees keen to take on a side-gig, our dedicated team can help you to craft employment contracts that cater directly to your situation.
Get in touch to find out how we can help.
FAQs about Moonlighting
1. Is moonlighting legal in the UK?
Moonlighting is not illegal in the UK. However, it also depends on the terms of your employment contract.
2. Can you get sacked for moonlighting in the UK?
You can only get sacked for moonlighting if your having a second job directly breaches a term of your employment contract. It is advisable to seek legal advice to understand your before taking any action against your employer.