Referral Bonus Law and Legal Definition

A referral bonus is a payment given to an existing employee or member who recruits (1) a new employee or member (usually conditioned on the new employee remaining employed for a specific period of time) or (2) a new client that produces new revenue for the organization.

The following is an example of a referral bonus program:

"To qualify for this referral fee, refer a candidate that we do not have in our database for a consulting or full time position. Make sure that if the individual calls us they give us your name, or if you want to call us, then we'll take it from there.

If the person you recommend secures a consulting position from or through ABC Co. you receive $20/per day for every day that the consultant is on billing for up to one year.

If the person you recommend secures a full time position with ABC Co. you will receive 10% of our net fee."