Second Jobs: Blessing or Curse?

A new era of moonlighting has dawned, raising complex questions for employers and their human resource professionals.

Can an administrative assistant launch an Internet business in off hours to make ends meet? Can a sales executive take a second job as a motivational speaker? What if the receptionist’s online business consists of a webcam, a PayPal account and a striptease? What if the sales executive manages his budding career as a motivational guru via cell phone and laptop during work hours—an activity described as "daylighting" in the media?

Advances in technology, combined with financial pressures from the global economic downturn, have made second jobs more convenient and more appealing to employees. In some cases, the appeal extends to employers as well: Last year, Japan’s electronics giant Fujitsu Ltd. revised its employment agreement with thousands of factory workers at a subsidiary to allow them to temporarily take second jobs after a sales decline reduced labor hours by 33 percent.

Author Marci Alboher’s book One Person/Multiple Careers: A New Model for Work/Life Success (Business Plus, 2007) focuses on people who develop "slash" careers with second jobs, such as lawyer/chef. In 2007-09, as unemployment soared, "so did the number of people ‘slashing’ out of necessity, rather than by choice," Alboher says.

Moonlighting and slashing are similar but not synonymous. A truck driver doubling as a local deliveryman during off hours likely is moonlighting; he wants more money, not a second career. Slashing refers to moonlighters who pursue second jobs for enjoyment, money or both.

In its optimal form, moonlighting offers benefits to both employee and employer; however, the practice poses risks to employers that require attention from HR professionals. Moonlighting occasionally can compromise trade secrets. More commonly, moonlighters become distracted or unproductive, and some may use company resources to perform secondary jobs. Mismanaging moonlighters and moonlighting policies represents another risk—one that can result in legal wrangles or regulatory problems with federal agencies such as the U.S. Department of Transportation (DOT) or state lawful conduct statutes.

Employment lawyers and HR managers insist that a straightforward approach marks the best way to manage moonlighters: Rely on job performance and conflict of interest policies, and apply them on a case-by-case basis.

Furlough-Busting

According to most estimates, 5 percent to 7 percent of the full-time U.S. workforce moonlights. However, traditional moonlighting waxes and wanes with the economy. During busts, some employees stung by pay freezes, work hour or wage reductions, or furloughs take on second jobs to earn more money or as a hedge against possible layoff.

A 2009 Society for Human Resource Management poll indicated that 19 percent of U.S. employees placed their risk of job loss at "moderate" or "significant." Another 2009 survey, conducted by Opinion Research Corp., found that 13 percent of U.S. employee respondents took on second jobs as a result of the economic downturn.

The Fujitsu example represents a classic win-win situation, asserts lawyer Laurent Badoux in the Phoenix office of law firm Littler Mendelson. "Productivity is not affected, and the employees remain tied to their primary jobs while earning about what they were earning before," he says.

Economic circumstance isn’t the only driver of moonlighting. Technological innovation spurred an increase in such activity during the relatively rosy economic period from 2006-07, when the number of full-time employees with secondary jobs increased by 5 percent, from nearly 3.98 million workers to 4.17 million workers, according to the U.S. Department of Labor.

Moonlighting’s recent growth is also partly attributable to the virtual nature of many jobs. Technology makes second jobs more of a norm, notes Cali Williams Yost, author of Work+Life: Finding the Fit That’s Right for You (Riverhead/Penguin Group, 2005). A caterer/nurse "could be checking on her bookings for the upcoming weekend while sitting at the nurses’ station on her iPhone."

Today’s moonlighters can conduct secondary businesses in quiet nooks with a smart phone and some basic applications, as recent headlines such as "Sneaky ‘Daylighters’ Risk Firing by Working Extra Jobs" confirm.

However, few HR managers encounter more than a handful of daylighting situations. "I don’t see that as an issue yet," says Richard Oyen, SPHR, director of HR and talent development for SumTotal, a Silicon Valley software company.

Other HR practitioners report approving traditional moonlighting requests to achieve retention and workforce development benefits. At professional services firm vcfo in Austin, Texas, for instance, Senior Associate Liz Hocker recalls a policy set by one client, a video-game firm, that says engineers and artists who receive approval from managers in advance may moonlight as long as the work is not done for a competitor. Hocker sees the following advantages: Executives avoid restricting employees’ off-hours activities and thus hurting recruitment and retention in a segment where talent is scarce, and employees can sharpen their skills with after-hours work.

Pros, Cons and Risks

Hence, moonlighting can help compensate for economic hardship, develop employee skills and improve retention.

Yet moonlighting has downsides as well. Hocker recently experienced some of them while working in a mid-sized construction company, where an exhausted employee with an after-hours secondary job frequently snoozed at his desk. The naps sparked heated performance discussions between the employee and his boss, and the employee ultimately quit his evening job.

"Sometimes, it’s just about attitude," Alboher notes. "Employees who can be transparent about their outside endeavors and feel supported as complete human beings will likely feel pretty good about their employers." On the other hand, second jobs can detract from employees’ focus, productivity and health. "You wouldn’t want a pilot showing up after pulling an all-nighter on her side job," Alboher says.

Nor do DOT officials want truck drivers and other transportation professionals logging too many hours behind the wheel. If a driver exceeds a threshold for hours worked, the DOT requires the driver’s company to maintain a log to itemize how the time is spent. Moonlighting drivers sometimes fail to update these logs because doing so would limit their road hours and result in lower paychecks. Pilots have limits, too.

Badoux advises HR managers to be aware of lawful conduct statutes. The receptionist with the adult web site may qualify as a brand risk to her company, but managers can run afoul of state laws if they fire her as a result of lawful behavior on her second job.

At the same time, employees bear some responsibility for avoiding conflicts of interest. "I ask people to consider whether their slashes are compatible," Alboher says. "Spending evenings as an exotic dancer certainly wouldn’t be a wise move for a high school teacher. But for a sex columnist at a major magazine, that side gig would be entirely appropriate."

Even when an employee’s moonlighting offers mutual benefits within the confines of relevant internal policies and external regulations, it still can cause problems. Lewis Maltby, president and founder of the National Workrights Institute in Princeton, N.J., previously worked in the private sector where he experienced a daylighting situation. One of his top sales executives operated a music business on the side, regularly making calls during primary work hours.

"It wasn’t a problem for me because I knew he was working 50 hours a week for me and 20 hours a week on the side," Maltby recalls. "I didn’t really care if some of those 20 hours came between 9 and 5." But, he says, other employees cared—and complained.

Policy Politics

Minimizing squabbles while maximizing moonlighting benefits requires a sensitive touch. That’s why Maltby and Badoux evaluate each second job individually.

Anti-moonlighting policies may be valid under the right circumstances, Badoux concedes. In most cases, however, he prefers a policy that says: You understand that this is your primary job and if any other activity that you engage with conflicts with what your duties are, it may lead to the end of your employment with this company.

A blanket no-moonlighting policy may offer some protection against intellectual property theft and regulatory noncompliance, but it raises potential legal and workforce engagement issues by preventing, for example, an accounts payable clerk from refereeing basketball games during off hours.

There are exceptions. Badoux asserts that regulated companies, such as those required to comply with DOT rules, should consider a thoughtfully crafted no-moonlighting policy. And for nonexempt employees, Fair Labor Standards Act overtime issues come into play if the employee’s second job is with an organization structurally connected to the same employer and the employee logs more than 40 hours of work in a week, combined, at both jobs.

In practice, Hocker and Oyen say, general policies laying out conflict of interest and performance expectations, complemented by case-by-case management, work well.

Most companies have policies dealing with second jobs in their employee handbooks. They "state that you can’t work for a competitor, you can’t give away trade secrets, and you can’t in any way harm the company," Oyen says. "Most companies, mine included, ask employees considering second jobs to ask their managers or ask HR. Our employees don’t need to obtain written approval, but we want them to give us a heads-up."

Beverly Widger, SPHR, senior vice president for human resources at Claremont Savings Bank in Claremont, N.H., agrees, explaining, "We do ask people to let us know if they are working a second job to ensure that there is not a conflict of interest between the second employer and the bank."

In addition, the bank’s monitoring software would identify daylighting if it were taking place. In fact, personal technology may enable employees to daylight on the sly, but not for long—thanks to technological transparency, colleague concerns, and existing performance and conflict of interest policies.

Oyen says evaluating moonlighting activities on a case-by-case basis enables managers and HR professionals to focus on a more important issue and one of moonlighting’s root causes: employee engagement.

As Oyen explains, employers fear that as soon as the economy gets better, their best and most enterprising employees will be gone.

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The author is a business writer based in Austin, Texas, who covers human resource and finance issues.

Web Extras

• SHRM HR Q&A: Can an employee moonlight while he is on leave under FMLA?
• SHRM article: Do You Need a Moonlighting Policy? (HR Magazine)
• SHRM article: What to Do About Moonlighting Workers (SHRM Online Employee Relations Discipline)
• Article: Working Two Jobs and Still Underemployed (Wall Street Journal)
• Article: Sneaky 'Daylighters' Risk Firing by Working Extra Jobs (CNN)
• Article: Screws Come Down on Daylight Robbers in the Workplace (The Courier Mail, Australia)
• Article: Fujitsu Allows Workers to Moonlight to Make Ends Meet (Japan Times)
• Regulations: Hours-of-Service Regulations (U.S. Department of Transportation)
• Legislation: Fair Labor Standards Act (U.S. Department of Labor)