Abstract
In recent years, the way people moonlight in the Indian IT industry has changed from a limited number of freelance gigs outside of normal working hours to having more than one employer at the same time, with one or both being moonlighting arrangements; this has become possible due to such factors as remote working arrangements that allow employees to work across multiple time zones, and to work under flexible supervision. This is indicative of larger shifts occurring within the broader digital economy. In addition, while working with an outside company on a part-time basis (e.g., freelance development work, consultancy work, etc.) presents very little risk, working with multiple employers as a full-time employee presents substantial legal, ethical, and operational risks.
This Article supports the establishment of a Digital Economy Employment Act. The Act would establish comprehensive reforms by defining permissible dual employment and modernising the systems for complying with labour and tax laws; by providing for remote and cross-border work; and, lastly, by providing technology-based enforcement tools to ensure compliance with all the above activities. Through this type of comprehensive framework, dual employment would be transformed from a conflict into a viable, regulated and sustainable part of India’s digital economy and would balance the constitutional freedom of individuals with reasonable boundaries.
Keywords: Moonlighting, Constitution, Gig Workers
Introduction
Moonlighting is defined as working in addition to your full-time job in non-office hours, and is where the word “Moonlighting” comes from, as in working at night or after your standard working day. In India, part of the technology industry (I.T.) has been created through illegal working agreements and currently offers many types of two jobs on the same day or working full-time, whilst being employed by different employers.
Types and Forms of Moonlighting in the IT Sector
Part-Time Moonlighting
- Time: 10–15 hours/week (evenings/weekends)
- Nature: Project-based or consulting; lower conflict risk
- Examples:
- Weekend consulting
- Freelance coding
- Technical writing/training
Full-Time Dual Employment
- Time: Two simultaneous full-time roles
- Risks: High legal/conflict risk; compliance challenges
- Enablers:
- Remote work & flexible hours
- Time zone differences
- Automation and low supervision
Legal Framework Governing Moonlighting in India
Constitution:
- Freedom to Earn – Article 19 (1) (g): The fundamental constitutional right provided by the Constitution of India is the right of people to earn their way through any vocation they choose or by operating any business or trade they desire. Article 19(6) allows for Reasonable Restrictions to this Freedom to Earn (i.e. based upon the well-being of society), as specified by the provisions of that section.
- Right to Life and Liberty – Article 21: In recent rulings, the Supreme Court of India has expanded the right to continue earning for a living as part of the right to Life in the interpretation of Article 21 and ruled that the right to Life encompasses the right to earn a living; thus, this rationale supports multiple ways of earning income to satisfy one’s basic needs.
- Adequate means of earning income – Article 39(a): The Directive Principles are designed to ensure policymakers, both for men and women, will provide appropriate and adequate means of earning income; thus, they are one of the tools supportive of multiple ways to earn.
- Worker Rights and Worker Conditions – Article 43: The Worker Rights and Worker Conditions provisions emphasise providing workers with adequate wages and working conditions that will enable them to earn an adequate living.
Factories Act:
The Factories Act prohibits an adult worker from being employed in two different factories on the same day. The only instance where adult workers are permitted to work at more than one factory on the same day is if the adult worker has received prior notice of the other employment and agrees to work in both factories on that day.
The Information Technology Act, 2000
- Section 43: “It deals with computer damage and imposes liability on workers who improperly access multiple computer systems. “
- Section 72: Breach of confidentiality resulting in the inability of workers who are IT compliant to work under the IT Act and are liable for up to Rs. 1 crore (INR) or 2 years in jail. Additionally, they will likely produce IT users with legal exposure when moonlighting based on what they do with data and for confidentiality.
Case Studies:
Wipro Case Study:
The case study of Wipro indicates a trend towards stricter enforcement of corporate ethics and behaviour. Wipro began terminating employees for violating exclusivity, conflict-of-interest and non-competitor clauses via an alleged practice of “moonlighting”, equating this behaviour to cheating. Whilst employees contest this assertion due to the lack of transparency associated with the mass termination, the courts have upheld Wipro’s right to terminate for this contractual breach. Furthermore, this case opens up a new avenue for cross-industry HR policies related to the enforcement of contractor obligations (Commercial Contracts) and the use of government databases in employment verification (Social Security, Income, and Employment Tax Records).[1]
Soham Parekh Case Study:
The case study of Soham Parekh focuses on the weaknesses in the monitoring of transnational employment patterns, as highlighted in the high number of employers that he worked for simultaneously and over a number of years. It has also raised a number of legal challenges for the technology companies (and others) that hired him, resulting in difficulties in future employment, lost revenue, uncertainty regarding his visa status, and increased demand for better verification methods, more controls over remote work practices, and clarifying the interaction between multiple employment contracts (Employment Contracts) within a single country (Transnational) as well as across multiple countries (Global Employment Contracts).[2]
Key Challenges
- Legal and Regulatory Issues:
- Contractual Restrictions: Exclusive clauses, along with the employer-consent requirement, create risk for employees.
- Outdated Laws: Currently, labor laws are not sufficient for IT and services, and enforcement is haphazard, varying between sectors.
- Remote Work and Platform Issues: A lack of jurisdictional clarity regarding cross-border (via remote work) and gig-based employment creates enforcement issues.
- Operational and Performance Risks:
- Decreased Productivity: A study found a decrease in productivity between 12–23% for individuals moonlighting.
- Collaboration: Employees with lower rates of teamwork participation, mentoring, and knowledge sharing have lower morale and lower-quality output.
Compliance and Administrative Burdens:
- Tax and Social Security Complexity: Employees have many personal finance (PF) accounts, income tax deducted at source (TDS) confusion, and have to file complicated tax returns.
- Higher Corporate Costs: There are additional costs incurred by companies to monitor their moonlighters, perform audits, enforce policies, and maintain compliance systems.
Social and Personal Impact:
- Work-Life Imbalance: Approximately 70% of employees feel fatigued and do not get enough time to rest.
- Ethical Pressure: Employees face pressure to be transparent, maintain integrity, and maintain professional credibility.
The following recommendations are made to the State for Addressing Legislation and the needs of Working Both Independently and in a Company Setting from the Gig Economy Bargaining Agreement Operational Guidelines:
- A new unified Digital Economy Employment Act will provide a comprehensive legislative framework relating to all aspects of dual employment.
- State Shops and Establishment Acts should be updated to reflect current IT sector employment activities, remote working, and the rising number of gig workers.
- Remove the current blanket prohibition on moonlighting and replace it with a risk-managed tiered approach.
- Develop a streamlined Worldwide Digital Self-Declaration and Non-Competition Approval process for rapid assessment of moonlighting requests.
Recommendations for Government to Take Action:
The government should create a comprehensive legislative framework for the digital economy to regulate dual employment in a single piece of legislation. To this end, the legislation should set out a clear definition of allowed and prohibited activities within the context of dual employment as well as industry-specific guidelines to acknowledge that certain industries (such as IT) have unique employment conditions.
- Digital Age Employment Regulations: Specific regulations regarding technology and remote work are necessary to address the unique nature of employment in the digital economy. There must be a structure in place to support remote working and cross-border dual employment, particularly with India being a major player in the IT outsourcing and export industries.
- Simplifying Tax Compliance for Multiple Employments: There must be a simple unified system for tax compliance for employees who have more than one place of employment. This should include a standardised method for recording multiple sources of income, together with a streamlined method for tax deductions. In addition, the social security systems we currently have in place must be modernised to allow employees to have multiple employments while contributing to a single unified account. Furthermore, social security benefits should be portable across all employers, and there must be a transparent method of outlining contributions that prevents potential abuse of the social security system.
- Enforcement & Monitoring Systems: By using technology to authenticate employment in real time, the implementation of a centralised automated system that integrates employment, tax, and pensions will enable government authorities to detect violations quickly.
CONCLUSION:
The rise of moonlighting in the Indian IT industry has created an increasingly nuanced and legal landscape. Moonlighting, which could be described as taking on informal side jobs after hours, has transformed into various types of moonlighting arrangements, on a scale from low risk part-time freelance to very high risk, e.g., full-time moonlighter working for multiple employers, in multiple locations/jurisdictions. The evolution of this practice has been fuelled by changes in the structure of work, with remote working, global talent pools, flexible work hours, automation, and the use of platforms, (among others) driving the increase in moonlighting. Thus, moonlighting has developed from being an exception to being indicative of the broader changes within the Indian labour market and Indian aspirations for economic development.
The Constitution of India promotes the philosophy of Work as an important part of having a good life by providing Articles in the Constitution. Articles provided in the Constitution state that an individual has the right to select his/her own occupation/business; earn a wage/Living; enjoy favourable conditions to work; have a sufficient salary to provide basic necessities; and have other rights that improve the dignity and quality of life of individuals who work. While a person has a variety of lawful means to earn a living based on these Articles, No person(s) have an absoluteness in their choice of a job; Article 19 (6) provides that “work” may have “reasonable restrictions imposed on an individual’s freedom of choice to work; this creates a defined Jurisdiction (legal) on how employers and/or The State can create Rules, Regulations, and Statutes regarding “moonlighting” to safeguard business interests, as well as to protect Public Policy and factors of ethics from being placed in jeopardy.
The Constitution of India encourages individuals to find Work that will enhance their quality of life by setting out specific Articles on Life. The articles support an individual’s right to choose their own occupation/business and earn a Living through earning a Wage; to have favourable Working Conditions; to have enough pay to meet their daily needs; and to have additional Rights which benefit the quality of Dignity and Life of Individuals That Work. Each Person has multiple ways in which they Lawfully earn their Living, as described in these articles. However, no Person(s) has been granted an absolute right to choose a Job based on the provisions in the Constitution; thus, Article 19 (6) states that the terms “Work” can have “reasonable limits” placed on an individual’s freedom of choice in relation to “employment”. The phrase “reasonable limits” provides a clear definition of the scope of Jurisdiction (Legal) in which Employers and/or The State can establish Rules, Regulations and Statutes in regard to “moonlighting” to protect their business interests, provide protection for The Public Policy, and provide protection for factors of ethics from being put in Jeopardy.
The proposed recommendations in particular the proposal of a unifying Digital Economy Employment Act Exhibit a forward-looking framework for addressing the dual employment challenges faced by all sectors of Australia’s economy today. A Digital Economy Employment Act could reconcile the constitutional principles of fairness, labour protection, commercial and contractual standards of behaviour and the technology reality of the digital economy within a single coherent framework that clearly identifies what forms of dual employment are permissible or prohibited, establishes industry standards for dual employment practices, and recognises the distinct nature of IT and Gig Work, so that all stakeholders within this space will know what their rights and obligations are under the new statutory framework.
In addition to its role as an employer, moonlighting is also a reflection of the changing relationship between work/law and work/technology. The existence of moonlighting in the IT sector exposes the inadequacies of the existing legal framework surrounding dual employment and highlights the need for adaptive governance within the digital economy. By undertaking the proper reform agenda of balancing, technology-enabled, and rights-based governance, India has the potential to transform moonlighting from a source of conflict and uncertainty to a legally regulated, transparent, and sustainable part of the digital economy with the protection of suitable rights for workers and preservation of the employers’ interest in conducting their business as a global leader in the future of work.
[1]https://www.indiatoday.in/technology/news/story/wipro-fired-300-people-for-moonlighting-how-did-the-company-catch-these-employees-2284309-2022-10-12
[2]https://medium.com/@bantsmedia/the-curious-case-of-soham-parekh-48f92736c1bd