Introduction
The rapid transformation of India’s workforce, driven by the IT revolution, digital platforms, and changing economic demands, has brought new forms of employment to the forefront. One such emerging issue is moonlighting—the practice of taking up multiple jobs or freelance work in addition to one’s primary employment. Although moonlighting has existed informally for decades, it gained significant public attention in 2022–2024 when several IT companies raised concerns about productivity, confidentiality, and conflicts of interest. At the same time, thousands of employees defended moonlighting as a legitimate way to earn supplementary income in an era of rising living costs and flexible online opportunities.
This debate raises important labor law questions: Is moonlighting legal in India? Does an employment contract restrict a worker from taking additional jobs? Can an employer terminate an employee for dual employment? Does the law need to evolve to accommodate new work realities? This article examines the legal status of moonlighting in India, the competing interests of employers and employees, and the need for clear legal reforms.
What is Moonlighting?
Moonlighting refers to engaging in secondary employment outside regular working hours of a primary job. It can be of different types:
1. Blue Moonlighting – taking up a secondary job unrelated to the primary one.
2. Green Moonlighting—taking up work similar to the current job but not conflicting directly.
3. Shadow Moonlighting—hiding the additional employment from the employer.
4. Creative or Freelance Moonlighting—participating in gig work, content creation, tutoring, or digital freelancing.
While moonlighting is often done for financial reasons, other motives include learning new skills, exploring creative interests, and diversifying job security in a volatile economy.
Legal Position of Moonlighting in India
India does not have a single comprehensive law that explicitly refers to moonlighting. Instead, the legality of moonlighting is assessed through employment contracts, state-level labour statutes, and general legal principles.
1. Employment Contracts
Most private-sector companies include clauses such as:
- Non-compete clause
- Conflict of interest clause
- Confidentiality and intellectual property (IP) protection clauses
- Exclusivity clause, which explicitly bars secondary employment
If such clauses exist, moonlighting without prior approval can be treated as a violation of contract and may lead to disciplinary action or termination. However, Indian courts have often held that overly broad non-compete clauses during employment are enforceable, but post-employment restrictions are generally invalid.
2. The Factories Act, 1948
Section 60 prohibits workers from working in two factories on the same day. This applies mainly to factory workers and not to most IT, service, or gig-sector employees.
3. Shops and Establishments Acts (State Laws)
Some states restrict dual employment for employees in commercial establishments. For example, in certain states, an employee is prohibited from taking up overlapping work during prescribed hours. However, enforcement varies widely.
4. Industrial Employment (Standing Orders) Act, 1946
Model standing orders prohibit employees from taking up additional employment that adversely affects their duties. Many companies adopt similar provisions.
5. Gig and Freelance Platforms
India’s growing gig economy—including Swiggy, Zomato, Ola, Uber, Upwork, and others—operates on freelance contracts, where exclusivity is generally not required. Therefore, gig workers are free to work on multiple platforms unless restricted contractually.
Arguments in Support of Moonlighting
1. Rising Cost of Living
With inflation, high rent, and urban expenses, dual employment helps individuals sustain livelihoods.
2. Freedom of Trade and Profession
Article 19(1)(g) of the Indian Constitution grants citizens the right to practice any profession or carry on any occupation, subject to reasonable restrictions. Many argue that blanket bans on moonlighting violate this freedom.
3. Skill Development and Future Readiness
Moonlighting often helps employees explore new skills—coding, content creation, marketing, or consulting—that may enhance professional growth.
4. Flexibility in the Digital Age
With remote work and online platforms enabling global freelancing, restricting multiple jobs seems outdated and impractical.
5. Encourages Innovation and Entrepreneurship
Many startups have emerged from side projects. Allowing moonlighting can promote creativity and entrepreneurship.
Arguments Against Moonlighting
1. Conflict of Interest
Working for competitors or similar clients can harm business interests.
2. Breach of Confidentiality
Employees may inadvertently (or intentionally) reveal trade secrets.
3. Impact on Productivity
Double employment may affect performance, attention levels, and work quality.
4. Health and Work-Life Balance Concerns
Long working hours across jobs can lead to burnout, stress, and health issues.
5. Misuse of Company Resources
Using office systems or time for secondary work may amount to misconduct.
Recent Developments and Controversies
IT Sector Disputes
In 2022–2024, many IT companies expressed strong opposition to moonlighting. Some firms argued it constituted cheating, while others—like Tech Mahindra—supported it under strict conditions. A few employees from major IT companies were terminated for undisclosed dual employment.
Swiggy’s Moonlighting Policy
In a landmark move, Swiggy introduced a policy allowing employees to pursue secondary work with permission, signaling a modern approach to workforce flexibility and setting an example for other companies.
Debate in Legal Forums
Legal experts argue that if moonlighting is done outside working hours and does not breach confidentiality, it should be legally acceptable. At the same time, companies have legitimate concerns about leakage of proprietary information, especially in technology sectors.
Why the Law Needs Clarity
Current laws are fragmented, and employment contracts vary widely. The absence of clear statutory guidance creates confusion and leads to disputes. The new Labour Codes—if implemented—may provide a more uniform framework, but they still do not explicitly address moonlighting.
There is a growing consensus that the government should introduce guidelines covering:
- Conditions under which moonlighting is permissible
- Mandatory employer disclosure requirements
- Protection of IP and confidentiality
- Rules preventing over-exploitation of workers
- Specific provisions for IT, gig, and hybrid work sectors
This would ensure that both employee rights and employer interests are balanced.
The Way Forward: Recommended Legal Reforms
1. Introduce Legal Definitions
Clear definitions of moonlighting, freelance work, and gig work should be incorporated into the Labour Codes.
2. Permit Moonlighting with Disclosure
Moonlighting should be allowed as long as employees disclose secondary work and employers assess any conflict of interest.
3. Allow Flexible Non-Compete Clauses
Employers can restrict working with direct competitors but should not prevent unrelated freelance work.
4. Protect Gig Workers
Gig workers should be guaranteed the right to work on multiple platforms without penalty.
5. Establish Work-Hour Harmonisation
The law may fix maximum weekly limits to prevent undue stress or exploitation.
6. Promote Transparency in Employment Contracts
All restrictions must be clearly mentioned and legally reasonable.
Conclusion
Moonlighting is neither inherently illegal nor universally permissible; it lies in a gray zone shaped by employment contracts, industry practices, and evolving digital work culture. India’s legal system is currently not fully equipped to address the complexities of dual employment, especially as flexible work and gig opportunities expand rapidly. A balanced regulatory approach is essential—one that protects the intellectual property and business interests of employers while safeguarding the constitutional freedom, financial needs, and career aspirations of employees.
As the nature of work continues to transform, labour laws must evolve to ensure that India’s workforce remains both innovative and protected. The debate on moonlighting is not just a legal issue but a reflection of changing economic realities, technological disruption, and the growing demand for flexibility in contemporary employment.
Contributed by : Lalit (Intern)