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Moonlighting: Important considerations for organisations and employees

12 Apr 2023

This article was contributed as a column in Legal Industry Reviews’ India Edition.

By Atul Gupta (Partner)

Recently, the issue of “moonlighting” has sparked a debate in the information technology industry in India and has led to discussions over the legality of this practice. “Moonlighting”, though not statutorily defined under the Indian law, is generally understood as taking up additional work (during or after working hours and/or on holidays) outside of one’s normal employment. This is usually done either through taking up secondary employment or through freelancing projects on a contractual basis.

While there is no specific law that deals with moonlighting in India, certain laws like the Factories Act, 1948 and few state Shops and Establishment Acts (such as in Delhi, Punjab, Telangana) prohibit employees (or in some cases employers) from “being employed” (or from “employing” individuals) for more than the statutorily prescribed working hours in another factory or establishment. Such provisions wouldn’t cover individuals taking up multiple part-time jobs or freelancing projects but restrict the total number of hours worked within the maximum statutory working hours.

Moonlighting by employees leads to the likelihood of an employee disclosing confidential and other sensitive information to a competitor and gives rise to the possibility of unauthorized use of the employer’s resources by the employee. Further, it can deprive the employer from procuring best services as employees engaging in multiple jobs may get over-worked and become less efficient.

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