Moonlighting, or the practice of working more than one job, is legal in most circumstances. However, you should make special considerations when taking on a second job, such as any agreements you have with your first job to not work with its competitors, tax consequences of two jobs and the penalties you may suffer if you try to do a second job's work at your primary job. With technological changes that make work virtual and 24--7, along with a global economic recession, second jobs have become more attractive to workers.

Although your day job may not explicitly forbid moonlighting, your company may have policies in place that limit what you can do with a second job. You could be dismissed if you break those rules.

Conflicts of Interest

Estimates from the Society for Human Resource Management, U.S. Census Bureau and the Bureau of Labor Statistics hold that between 5 and 7 per cent of full-time workers have a second job. ABC News reports that many more people earn extra cash outside a primary job. Moonlighting typically occurs in waves that follow the patterns of the economy.

During downturns when employees may experiences salary freezes and work reductions, they take a second job to make more money. They may also be trying to stay one step ahead of potential layoffs. SHRM says that employers have one major focus when it comes to moonlighting, and that is protecting its trade secrets. If you work for one of its competitors, there's a chance that you will reveal something about how your first job does business.

To protect against that risk, employers may ask you to sign agreements that bar you from working with competitors or disclosing any company information externally. Some professions, like transportation, have regulations about how many hours a driver or pilot works. If an employee in such a case is moonlighting and fails to notify their main employer, the consequences can be deadly and present a huge liability to companies.

Tax Implications of Two Jobs

The IRS says if you have income from two jobs at the same time, you must split the allowances you take on form W-4 between each job. You cannot claim the same allowances with more than one employer at the same time.

Alternatively, you can claim all your allowances with one employer and none with the other. Inattention to this matter can land you in hot water. For one, you may have too little taxes taken out of your pay and wind up owing.

In addition, says Bankrate.com, if your second job involves consulting or otherwise being an independent contractor, you may be on the hook for more taxes and have to file additional forms with your regular tax return. Talk with a qualified tax accountant for the most favourable way to set your allowances and handle your tax return.

When Your Second Job is Self-Employment

The most common problem you may encounter is when your second job involves building your own business. Employers are especially on guard to their employees' level of productivity and distraction as well as the use of company resources to perform second jobs. This is a common reason for dismissal due to a second job, says SHRM. To avoid a potential legal landmine with your day job, avoid using company time for your personal pursuits.

Read Your Employee Handbook

Some companies have fairly strict moonlighting policies in place. Yours may require you to notify human resources, in writing, that you have a second job.

Some companies require employees to have written permission before they can accept a second position. Although employee handbooks don't constitute contracts, not following the rules can result in some sort of discipline, up to and including termination.