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Can I offer contests that involve referral bonuses in Washington? What are the requirements?

Based on the documents provided, it appears that offering contests that involve referral bonuses in Washington is allowed, but there are certain requirements that must be met.

Requirements for offering referral bonuses in Washington

According to [2], RESPA Section 8(a) prohibits kickbacks for business referrals involving a federally related mortgage loan. However, this does not apply to all types of referral bonuses.

If the referral bonus is considered an excludable discretionary bonus, it may be allowed. Examples of excludable discretionary bonuses include bonuses for overcoming a challenging or stressful situation, bonuses to employees who made unique or extraordinary efforts not awarded according to pre-established criteria, employee-of-the-month bonuses, severance bonuses, and referral bonuses to employees not primarily engaged in recruiting activities [1].

Therefore, to offer referral bonuses in Washington, the bonus must meet the following requirements:

  • The bonus payment is not made according to any prior contract, agreement, or promise causing an employee to expect such payments regularly.
  • The bonus is excludable and discretionary, as defined by the Fair Labor Standards Act (FLSA) [1].
  • The bonus does not involve kickbacks for business referrals involving a federally related mortgage loan, as prohibited by RESPA Section 8(a) [2].

It is important to note that these requirements may not be exhaustive and other regulations may apply. It is recommended to consult with a legal professional for specific guidance on offering referral bonuses in Washington.

Therefore, to answer your question, you can offer contests that involve referral bonuses in Washington if the bonus meets the requirements outlined above.

Source(s):
Jurisdiction

Washington