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Outside Employment Policy Template (Moonlighting Policy)
Moonlighting policy: disclosure and approval, prohibited outside work, DOT hours-of-service limits, overtime rules, California carve-outs, request form.
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What you get
- Numbered clauses on disclosure, approval, prohibited outside work and use of company resources
- Safety-sensitive hours rules, including DOT hours of service for drivers
- An FLSA note on when a second job for the same or a joint employer triggers overtime
- California notes on off-duty conduct (Labor Code 96(k)), non-competes (B&P 16600) and inventions (Labor Code 2870)
- An outside employment request form table with a manager and HR decision section
Template preview
A preview of the structure. Download the PDF or CSV for the complete, ready-to-use version.
Policy details
- Company legal name
- Effective date— e.g. 1 January 2027
- Policy owner— e.g. HR Director
- Safety-sensitive roles (clause 6)— e.g. CDL drivers, forklift operators, on-call field technicians
1. Purpose and scope
1.1 [Company legal name] ("the Company") does not object to employees holding a second job, running a business or doing freelance work in their own time. This policy sets the limits needed to protect safety, performance, confidential information and customer relationships. 1.2 "Outside employment" means any paid or unpaid work for another employer, self-employment, freelance or consulting work, gig work, board or advisory roles, and running or owning an active part in a business. Passive investments are covered by the conflict of interest policy. 1.3 This policy applies to all employees, full-time and part-time.
2. General rules
2.1 Company work comes first. Outside employment must not interfere with the employee's scheduled hours, on-call duties, required overtime, travel, or ability to perform the job safely and to standard. 2.2 Outside work must be done outside Company working time. Employees must not use Company equipment, systems, email, phone, software licenses, premises, vehicles, supplies or staff for outside work. 2.3 Employees must not use or disclose the Company's confidential information or trade secrets in outside work. The confidentiality agreement applies in full. 2.4 Employees must not suggest that the Company endorses their outside work, or use the Company's name, logo or their job title to promote it, without written approval.
3. Disclosure and approval levels
| Type of outside work | Example | Required | Who decides |
|---|---|---|---|
| Unrelated work, no overlap | Weekend barista; tutoring; selling crafts online | Disclose on form within 10 working days | HR logs, no decision needed |
| Same industry, not a competitor | Payroll specialist does bookkeeping for a local restaurant | Written approval before starting | Manager + HR |
| Work for a customer, vendor or partner | Developer freelances for a Company customer | Written approval before starting; usually declined | HR + Legal |
| Work for a direct competitor | Account manager consults for a competing agency | Not permitted while employed | n/a |
4. Prohibited outside work
Employees must not, while employed by the Company: 4.1 work for, consult for, or hold an ownership stake of more than [1]% in a direct competitor, as listed by [Legal] on request; 4.2 provide services to a Company customer, vendor or partner that the employee deals with in their Company role, or solicit Company customers for outside work; 4.3 do outside work during paid Company time, including paid breaks and on-call periods where the employee must respond within [30] minutes; 4.4 do outside work that requires them to use or disclose Company confidential information; 4.5 do outside work that would breach a law or regulation applying to their Company role, such as a licensing restriction or an hours-of-service limit. These restrictions apply only during employment. Any restriction after employment ends is governed by the employee's signed agreements and applicable law.
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How to use this template
- 1
Decide what needs approval
Set the categories in clause 3: which outside work only needs disclosure, and which needs written approval before it starts.
- 2
Mark safety-sensitive roles
List the roles in clause 6 (drivers, machine operators, nurses, security) where total hours across all jobs must be tracked.
- 3
Check state law before restricting
In states with off-duty conduct laws, restrict outside work only where it creates a real conflict, uses company resources, or affects safety or performance.
- 4
Collect the form and log decisions
Employees submit the request form. HR logs each decision and reviews approvals once a year or when the employee's role changes.
Frequently asked questions
What is a moonlighting policy?
A moonlighting policy sets the rules for employees who hold a second job or run a side business. It usually requires employees to disclose outside work, bans work for competitors and customers, prohibits using company time, equipment or confidential information, and sets hours limits for safety-sensitive roles. It lets people earn extra income while protecting the employer's legitimate interests.
Can an employer stop you from having a second job?
In most US states an at-will employer can restrict outside work, but some states limit this. California, New York and Colorado protect lawful off-duty conduct, so a blanket ban on unrelated second jobs is risky there. Employers can still bar work for competitors, work that uses confidential information, and work that causes safety or performance problems.
Do I have to tell my employer about a second job?
Only if your employment contract or company policy requires it. Many policies ask for disclosure of all outside work and prior approval for work in the same industry. Drivers covered by DOT hours of service must record compensated work for other employers as on-duty time, so disclosure is effectively required for them by federal rules.
Does a second job count toward overtime?
Hours for an unrelated employer do not. Under 29 CFR 778.103, an employer must total all hours a non-exempt employee works for it in a workweek, even across two different roles, and joint employers must total hours worked for both. So 32 hours in one role plus 12 in another for the same employer means 4 overtime hours.
Is moonlighting for a competitor allowed in California?
Not usually while you are still employed. Business and Professions Code 16600 voids most non-competes after employment ends, but during employment the employee's duty of loyalty and trade secret law still apply, and employers can prohibit working for a direct competitor. Lawful, unrelated side work done off-duty is protected by Labor Code 96(k) and 98.6.
Who owns what I create in a side project?
Usually you do, unless your invention assignment agreement says otherwise and the law allows it. California Labor Code 2870 protects inventions made entirely on your own time without company equipment or trade secrets, unless they relate to the employer's business or result from work done for the employer. Several other states have similar laws.