This is standard, and good for both parties. There's a thing in copyright law called "work for hire." Basically, if I pay you to make or work on a project specifically for me, I own the copyright even if you made it. Like an implied sale of the rights at the work's inception.
If a designer makes something in or adjacent to the field that his employer exist in, things become murky. Did the employee use company resources/time to develop the product? Does the product compete in any way with his employer? Is some aspect of the project within the employee's existing job scope, meaning he's holding back on his paid job to benefit his private project? All those can become arguments that could cause the company to try to gain at least partial ownership of the new project as a work for hire since the company is paying the employee to help them make stuff already. There is actually a ton of case law about this kind of stuff out there, because it happens relatively commonly.
Getting the project's scope and ownership on paper before there are monetary stakes yet makes it easier and clearer for everyone. It's an annoying hoop to jump through, but that's just the world we live in.
If a designer makes something in or adjacent to the field that his employer exist in, things become murky. Did the employee use company resources/time to develop the product? Does the product compete in any way with his employer? Is some aspect of the project within the employee's existing job scope, meaning he's holding back on his paid job to benefit his private project? All those can become arguments that could cause the company to try to gain at least partial ownership of the new project as a work for hire since the company is paying the employee to help them make stuff already. There is actually a ton of case law about this kind of stuff out there, because it happens relatively commonly.
Getting the project's scope and ownership on paper before there are monetary stakes yet makes it easier and clearer for everyone. It's an annoying hoop to jump through, but that's just the world we live in.