Federal employees can hold a second job, but the rules for a federal employee’s second job are strict: at almost every agency you need written approval from your ethics office before you start, and a handful of activities are barred outright by criminal statute no matter who approves them. The framework lives in the Standards of Ethical Conduct at 5 CFR Part 2635, backed by criminal conflict-of-interest statutes in Title 18. Getting this wrong can cost you your job, and in some cases your freedom.
Get Approval Before You Start
There is no single government-wide form that every federal employee files before taking outside work. Instead, 5 CFR § 2635.803 lets each agency set its own prior-approval rules, and most major agencies require written approval before you begin.1eCFR. 5 CFR 2635.803 – Prior Approval for Outside Employment and Activities Assume you need it until your Designated Agency Ethics Official (DAEO) tells you otherwise.
The typical process: submit a written request through your supervisor to the ethics office describing the work, the employer, expected hours, and expected pay. The ethics official checks it against the conflict-of-interest standards and approves, denies, or approves with conditions. If your duties or the outside work change later, resubmit.
Scrutiny is heaviest for employees who file financial disclosure reports. Senior positions file the public SF-278; employees whose work touches contracting, procurement, grants, or regulation file the confidential OGE Form 450. Expect a longer review if either applies to you. And note this: failing to seek required approval is itself a violation, even for an activity that would have sailed through.
Activities That Are Always Off-Limits
Some outside work is banned by federal criminal law. No ethics official can waive these, and the penalties reach federal prison.
Representing Private Parties Before the Government
You cannot accept compensation for acting as someone’s agent or attorney before any federal agency, court, or commission on a matter where the United States is a party or has a direct and substantial interest.2Office of the Law Revision Counsel. 18 USC 203 – Compensation to Members of Congress, Officers, and Others in Matters Affecting the Government A companion statute bars the same representational activity even when you’re unpaid, so you cannot serve as a volunteer advocate for someone pressing a claim against the government either.3Office of the Law Revision Counsel. 18 USC 205 – Activities of Officers and Employees in Claims Against and Other Matters Affecting the Government This is what trips up federal employees who want to practice law, consult, or lobby on the side. It reaches matters before any part of the federal government, not just your own agency.
Participating in Matters That Affect Your Financial Interests
If a government decision would affect a side business you own, a company you work for on the side, or an organization where you’re an officer or director, you cannot participate in that decision in your federal role.4Office of the Law Revision Counsel. 18 USC 208 – Acts Affecting a Personal Financial Interest “Participate” is broad: recommendations, advice, and investigations all count. The financial interests of your spouse, minor child, and business partner count as your own.
Salary Supplementation
No outside person or entity may pay you as compensation for your government services, and you may not accept such payments.5Office of the Law Revision Counsel. 18 USC 209 – Salary of Government Officials and Employees Payable Only by United States A legitimate second job paying you for genuinely separate services is fine. The violation is when the outside money is really a reward for what you do in your federal role.
Teaching, Speaking, and Writing About Your Work
You cannot receive outside compensation for teaching, speaking, or writing when the subject relates to your official duties. That covers topics you’re assigned to work on, any ongoing policy or program at your agency, and information from your government work that hasn’t been made public.6eCFR. 5 CFR Part 2635 – Standards of Ethical Conduct for Employees of the Executive Branch
Paid work on unrelated topics is generally fine, but still clear it with your ethics official. The same rule bars you from using nonpublic information from your job in any outside transaction or to benefit yourself or anyone else.
Keeping the Two Jobs Separate
Time and equipment are absolute lines. No outside work during duty hours, including while teleworking. No government computers, printers, phones, email, or office space for outside work.6eCFR. 5 CFR Part 2635 – Standards of Ethical Conduct for Employees of the Executive Branch
Your title is off-limits too. Listing “Senior Analyst, Department of X” on your consulting site, or invoking your position to attract clients, violates 5 CFR § 2635.702. Even including your government role in a paid speaker bio can cross the line if it suggests government endorsement.
If You’re Interviewing for a Second Job
The rules kick in before you actually start the job. The moment you enter employment discussions with a prospective outside employer, you must step away from any official matter that could affect that employer.7eCFR. 5 CFR 2635.604 – Recusal While Seeking Employment
The trigger is any response to an employer’s outreach other than a flat rejection. Reply with anything except “no thanks” and you’re in employment discussions. From that point, recuse yourself from any matter involving that company and notify your supervisor or ethics official. The same applies if you reach out first and get an interested response. Sending an unsolicited resume that hasn’t been answered yet doesn’t trigger recusal, but tell the ethics office anyway.
Political Side Work and the Hatch Act
If your second job is political, the Hatch Act layers on more restrictions. Most federal employees can take part in political campaigns on their own time, but a few activities are always banned, on duty or off.8Office of the Law Revision Counsel. 5 USC 7323 – Political Activity Authorized; Prohibitions You cannot run for partisan office. You cannot use your position to influence an election — no leveraging your title, pressuring subordinates to attend political events, or steering people with agency business toward or away from political participation. You cannot solicit political contributions, whether by hosting a fundraiser, selling tickets, or asking for donations by email or social media.
On duty, in a federal building, in uniform, or in a government vehicle, the restrictions tighten. In those settings you cannot display campaign material, post partisan content on social media, wear political buttons, or do anything to help or hurt a party or candidate. Employees at the FBI, CIA, and certain Justice Department divisions face stricter rules that ban active campaign participation even off duty. Penalties include removal from federal service, suspension, reduction in grade, or debarment from federal employment for up to five years.9Office of the Law Revision Counsel. 5 USC 7326 – Penalties
Taxes on Side Income
Side income changes your tax picture, especially if the work is self-employment rather than a W-2 job.
Self-Employment Tax
Freelance, consulting, and small-business net earnings are subject to self-employment tax at 15.3%, covering both Social Security (12.4%) and Medicare (2.9%). That’s roughly double the employee share, because you’re paying both halves.10Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You can deduct the employer-equivalent half when figuring your adjusted gross income.
The Social Security portion applies only up to the combined wage base, which is $184,500 for 2026.11Social Security Administration. Contribution and Benefit Base If your federal salary already meets or exceeds that threshold, your side earnings owe only the 2.9% Medicare portion, plus the 0.9% additional Medicare tax if your total earnings exceed $200,000 (single) or $250,000 (married filing jointly). If your federal salary is below the threshold, your self-employment earnings are taxed for Social Security until the combined total reaches $184,500.
Estimated Tax Payments
Side income usually has no taxes withheld. If you expect to owe $1,000 or more at filing, the IRS requires quarterly estimated payments.12Internal Revenue Service. Estimated Taxes Missing or underpaying triggers penalties even if you pay in full at filing. The IRS Tax Withholding Estimator at irs.gov can help you decide whether to raise withholding on your federal paycheck instead.
Retirement
Your FERS annuity is calculated from your “high-3” federal basic pay. Second-job income does not count toward it.13U.S. Office of Personnel Management. FERS Information – Computation It can, however, add to your Social Security record if your combined earnings stay below the wage base.
Penalties for Getting It Wrong
Consequences range from a letter of reprimand to federal prison, depending on the conduct and intent.
Administratively, agencies can issue reprimands, suspend you without pay, demote you, or fire you. Skipping the required approval process is itself sanctionable, even when the underlying activity was permissible.
Criminally, violations of 18 U.S.C. §§ 203, 205, 208, and 209 are prosecuted under 18 U.S.C. § 216. A non-willful violation carries up to one year in prison; a willful violation, up to five.14Office of the Law Revision Counsel. 18 USC 216 – Penalties and Injunctions The Attorney General can also seek civil penalties of up to $125,662 per violation (the inflation-adjusted figure as of 2025), or the amount of compensation you received for the prohibited conduct, whichever is greater.15eCFR. 28 CFR Part 85 – Civil Monetary Penalties Inflation Adjustment Civil and criminal penalties can stack, and neither shields you from separate administrative discipline.
Before you accept any outside role, talk to your Designated Agency Ethics Official. They know your agency’s supplemental rules, they can flag conflicts you may not see, and their written approval is your best protection if questions come up later.