Outside Employment and Moonlighting Policy
Outside Employment and Moonlighting Policy template for disclosing second jobs, checking conflicts, and setting approval rules that protect job performance, confidentiality, and compliance.
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Overview
This Outside Employment and Moonlighting Policy template sets the rules for when employees must disclose second jobs, freelance work, consulting, volunteer commitments, or self-employment that could interfere with their role. It gives the policy holder a structured process for reviewing conflicts of interest, scheduling conflicts, confidentiality risks, use of company property, and any impact on performance or attendance.
Use this template when you need a consistent way to evaluate outside work instead of handling requests case by case. It is especially useful for organizations with client relationships, access to trade secrets, safety-sensitive duties, overtime exposure, or roles where fatigue and scheduling overlap matter. The template also helps managers document decisions, set conditions for approval, and escalate concerns when outside work changes over time.
Do not use it as a blanket ban on all off-duty work unless your legal review supports that approach in the relevant jurisdiction. It is not a substitute for wage-and-hour compliance, noncompete review, or a separate confidentiality policy. If the employee’s outside activity may involve protected concerted activity under the NLRA, a disability-related accommodation under the ADA, or leave issues under the FMLA, those issues should be handled through the appropriate process rather than by a one-line denial. The template is designed to help you define disclosure, review, approval, monitoring, and discipline in one place.
Standards & compliance context
- The policy should be consistent with the FLSA by avoiding off-the-clock work, tracking all compensable time, and recognizing that outside employment does not eliminate overtime obligations.
- If an employee’s outside work overlaps with FMLA leave, the policy must not interfere with eligible leave rights or require disclosure beyond what is needed to administer the leave properly.
- Restrictions should be reviewed for Title VII, ADA, ADEA, and EEOC concerns so they are applied uniformly and do not disproportionately affect protected classes or accommodation requests.
- The policy should preserve NLRA-protected concerted activity and not prohibit employees from discussing wages, hours, or working conditions with coworkers or outside parties where protected.
- State law may narrow employer control over off-duty conduct, conflicts, or whistleblowing, including California, New York, Washington, and Illinois overlays that should be checked before rollout.
General regulatory context for orientation only — verify current requirements with counsel or the relevant agency before relying on this template for compliance.
What's inside this template
Purpose
Explains why the policy exists and what business risks it is meant to control.
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This policy establishes a good-faith process for employees to disclose outside employment and moonlighting so the company can review potential conflicts of interest, protect confidential information, prevent interference with job duties, and ensure compliance with applicable law. This policy is intended to support consistent decision-making and is not intended to restrict lawful off-duty conduct, protected concerted activity under **NLRA Section 7**, or rights protected by applicable wage and hour, leave, disability, or anti-discrimination laws.
Scope
Defines which workers, work arrangements, and outside activities are covered.
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This policy applies to all employees, including full-time, part-time, temporary, exempt, and non-exempt employees, unless a collective bargaining agreement, written employment agreement, or applicable law provides otherwise. **California employees:** This policy will be applied consistent with California Labor Code protections for lawful off-duty conduct and other applicable state law limits on employer control over off-duty activities. **All jurisdictions:** Where state or local law provides greater protection than this policy, the law controls.
Definitions
Clarifies terms like outside employment, moonlighting, conflict of interest, and confidential information.
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For purposes of this policy: - **Outside employment** includes any secondary job, freelance assignment, consulting engagement, gig work, self-employment, or ownership interest that involves active work. - **Moonlighting** means working another job or business during non-working time. - **Competition** means work for a competitor, customer, vendor, or business that offers substantially similar products or services. - **Interference** means any impact on attendance, punctuality, scheduling, fatigue, performance, safety, or the completion of essential functions. - **Confidential information** includes non-public business, customer, employee, financial, technical, or strategic information. - **Protected activity** includes rights protected by the NLRA, FMLA, ADA, Title VII, and other applicable laws.
Policy Statement
States the core rule for disclosure, approval, and restrictions on outside work.
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Employees may engage in outside employment only if the activity does not create a conflict of interest, does not interfere with job duties or performance, does not use company time or resources, and does not disclose or misuse confidential information. Employees must not: - Work for a competitor, customer, vendor, or other business relationship that creates an actual or potential conflict of interest without written approval. - Perform outside work during scheduled working time, on-call time, or while using company equipment, systems, or confidential information. - Allow outside employment to cause fatigue, attendance problems, safety risks, or performance issues. - Represent that they are acting on behalf of the company in any outside business. - Engage in outside work that violates any non-disclosure, non-solicitation, conflict of interest, or other lawful restriction in a signed agreement. The company will review requests in a consistent, non-discriminatory manner and will not base decisions on protected characteristics under **Title VII of the Civil Rights Act of 1964** or on disability-related assumptions. If an employee requests an adjustment related to a disability, the company will engage in the **interactive process** and consider **reasonable accommodation** as required by the **ADA**.
Procedure
Shows the step-by-step process for disclosure, review, decision-making, and follow-up.
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1. **Disclosure required before starting outside work.** Employees must submit a written outside employment disclosure before accepting or beginning outside work. 2. **Information required.** The disclosure must include the outside employer or business name, nature of work, hours, location, expected duration, whether the work is competitive, and whether company equipment, data, or contacts will be used. 3. **Conflict check.** HR, the employee's manager, and/or Compliance will review the request for conflicts of interest, schedule interference, confidentiality concerns, safety issues, and any impact on the employee's ability to perform essential functions. 4. **Approval decision.** Approval must be in writing and may include conditions such as no overlap with scheduled hours, no use of company resources, no solicitation of company customers or employees, and periodic re-review. 5. **Ongoing duty to update.** Employees must promptly report any material change in outside employment, including changes in hours, duties, clients, ownership, or competitive relationships. 6. **Reassessment.** The company may withdraw approval if the outside work later creates a conflict, performance issue, attendance concern, or legal/compliance risk. 7. **Recordkeeping.** HR will maintain disclosures and decisions in a confidential file with access limited to personnel with a legitimate business need.
Roles & Responsibilities
Assigns ownership for employee disclosure, manager review, HR oversight, and final approval.
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**Employees** must disclose outside employment in advance, answer review questions truthfully, comply with any conditions of approval, and immediately report changes. **Managers** must review requests objectively, document any operational concerns, and escalate potential conflicts or performance impacts to HR. **HR / Compliance** must perform the conflict check, ensure consistent application, maintain records, and coordinate any required legal review. **Policy holder / business leaders** must ensure this policy is applied in a good-faith, non-discriminatory manner and that decisions are based on legitimate business needs.
Compliance, Restrictions, and Discipline
Sets the enforcement standard, the limits on outside work, and the consequences for violations.
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Violations of this policy may result in corrective action up to and including termination, subject to applicable law and any collective bargaining agreement. Examples of violations include: - Failing to disclose outside employment before starting work. - Providing false or incomplete information during the review process. - Using company time, equipment, systems, or confidential information for outside work. - Engaging in outside work that creates a conflict of interest or materially interferes with job duties. - Ignoring conditions of approval. **FLSA note:** This policy does not alter wage and hour obligations, including overtime pay requirements for non-exempt employees when work is performed for the company. Outside employment time is not company compensable time unless the company directs, controls, or suffers/permits work for the company under applicable law. **NLRA note:** Nothing in this policy is intended to prohibit employees from discussing wages, hours, or working conditions, or from engaging in other protected concerted activity.
Review and Revision
Establishes the update cycle, version control, and who must approve changes.
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This policy will be reviewed at least annually and updated as needed to reflect changes in law, business operations, or compliance expectations. The company may revise this policy at any time, provided that changes will be communicated to employees in accordance with applicable law.
How to use this template
- 1. Fill in the policy holder name, effective_date, version, review_frequency, applicable_jurisdictions, and applicable_roles before publishing the policy.
- 2. Define which outside activities require disclosure, including second jobs, consulting, gig work, business ownership, volunteer leadership, and family business work.
- 3. Assign a manager, HR, or compliance reviewer to evaluate each disclosure for conflicts, scheduling issues, confidentiality concerns, and any impact on essential functions.
- 4. Use the procedure section to collect the employee’s outside employer, duties, hours, and any overlap with company time, equipment, clients, or records.
- 5. Document the decision, any conditions for approval, and any follow-up review date, then apply the discipline path if the employee fails to disclose or violates restrictions.
Best practices
- Require disclosure before the outside work starts, not after the conflict has already affected performance or attendance.
- Limit restrictions to legitimate business concerns such as confidentiality, conflicts of interest, safety, fatigue, and interference with essential functions.
- Use a written decision record for every approval, denial, or conditional approval so managers apply the same standard across employees.
- Separate moonlighting review from protected leave, accommodation, and concerted activity issues so the policy does not chill rights under the FMLA, ADA, or NLRA.
- State clearly whether employees may use company time, equipment, email, or data for outside work, and treat any exception as a documented approval.
- Recheck approvals when the employee changes duties, hours, clients, or outside employer, because a low-risk side job can become a conflict later.
- Train managers not to promise approval informally, since undocumented exceptions create uneven enforcement and retaliation risk.
What this template typically catches
Issues teams running this template most often surface in practice:
Common use cases
Frequently asked questions
Who should use an outside employment and moonlighting policy?
Use it when employees may take a second job, freelance, consult, run a side business, or volunteer in a way that could affect work. It is especially useful for roles with access to confidential information, safety-sensitive duties, client relationships, or scheduling constraints. The policy gives the policy holder a consistent way to review disclosures instead of handling each request ad hoc.
Does this policy require employees to get approval for every outside job?
That depends on how you configure the template. Many employers require prior written disclosure and approval only when the outside work could create a conflict, interfere with performance, involve a competitor, or use company time or property. The policy should make the trigger clear so employees know when disclosure is mandatory and when notice is simply recommended.
How often should outside employment disclosures be reviewed?
Review disclosures when the employee first reports the outside work, whenever the outside role changes, and at least annually as part of policy review or conflict re-certification. Annual review is a good default for the policy itself, but active moonlighting arrangements may need more frequent check-ins if schedules, duties, or business relationships change. The template should include effective_date, version, and review_frequency.
What legal issues does moonlighting create?
Common issues include wage-and-hour compliance under the FLSA, overtime tracking across employers, conflicts with FMLA leave restrictions, discrimination or retaliation concerns under Title VII and the EEOC framework, disability accommodation overlap under the ADA, and concerted activity protections under the NLRA. State law can add limits, such as California restrictions on off-duty conduct, Illinois One Day Rest in Seven rules, or whistleblower protections in states like New York and Washington. The policy should avoid overbroad bans and instead focus on legitimate business reasons.
Can the policy ban employees from working for competitors?
It can restrict outside work that creates a conflict of interest, uses confidential information, or interferes with essential functions, but the exact scope must be tailored to applicable law. Some states limit employer control over lawful off-duty conduct or require narrow, job-related restrictions. The safest approach is to define competition, client solicitation, and confidentiality concerns clearly and route edge cases through a documented review.
What are the most common mistakes in moonlighting policies?
The biggest mistakes are banning all outside work without a business reason, failing to define what counts as a conflict, not addressing overtime or scheduling impacts, and skipping a discipline section. Another common gap is not explaining who reviews disclosures or how decisions are documented. A strong template should include a good-faith review process, documented warning steps, and a PIP path when outside work affects performance.
How does this policy interact with remote work and gig work?
Remote work and gig work increase the need for clear disclosure rules because employees may be working flexible hours across multiple employers or platforms. The policy should address use of company equipment, confidentiality, timekeeping, and whether outside work can occur during scheduled work hours. It should also clarify that remote status does not remove the obligation to protect company data or meet job expectations.
How should this be rolled out to employees?
Publish the policy, collect acknowledgments, train managers on how to evaluate disclosures consistently, and create a simple form or workflow for requests. Employees should know where to submit outside employment disclosures, what information is required, and how long review usually takes. Rollout works best when the policy is paired with a short manager guide and a standard decision record.
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