University Policies

Employee Referral Incentive Program
Employee Referral Incentive Program
Policy Statement
Reason for Policy
Additional Contacts
Related Information
Related Forms
About This Policy
Effective Date:
Date of Last Review/Update:
Responsible University Office:
Human Resources
Responsible University Administrator:
Vice President for Human Resources
Policy Contact:
IU Human Resources
Policy Feedback:
If you have comments or questions about this policy, let us know with the policy feedback form.
Print or view a PDF of this policy
Many policies are quite lengthy. Please check the page count before deciding whether to print.
This policy applies to all Staff employees.
Back to top
Policy Statement
  1. The University supports departments offering an employee referral incentive for vacant Staff positions in specific jobs that are hard to fill and in high demand.
  2. A list of approved vacant positions and/or specific jobs is managed by University Human Resources.
    University Human Resources will determine applicable jobs for the Employee Referral Incentive based on market demand studies and length of position openings at the University. (The list of jobs noted in the Appendix will be reviewed at least annually, with additions and deletions as determined appropriate.)
  3. The Employee Referral Incentive provides eligible Staff employees with lump-sum compensation that is outside of base salary or wages.
  4. To be eligible for an employee referral incentive, the recipient must be an active University employee on the date the payment is processed.
  5. The following individuals are not eligible for the employee referral incentive.
    1. University managers and supervisors who are involved in the recruitment of the vacant Staff position
    2. Human Resources professionals in all units
    3. Hiring committee members, if applicable, and any other employee involved in influencing the hiring decision
    4. Immediate family members of the new employee, regardless of their role at Indiana University
  6. Tax treatment of bonus payments
    Employee referral incentive pay shall not be grossed up to cover taxes.
  7. Funding of the bonus payments
    The hiring department is responsible for funding the payment of an Employee Referral Incentive bonus payment.
  8. The payment shall not be funded from contract or grant funds.
Back to top
Reason for Policy
This policy provides University managers and supervisors with guidelines and procedures for an employee referral incentive program to supplement a department’s recruiting effort for hard-to-fill and high-demand vacant Staff positions.
Back to top
  1. The Employee Referral Incentive Program is designed to assist a department’s recruiting effort for hard-to-fill and high-demand vacant Staff positions. The recruiting results should advance the University’s employment goals and initiatives. An employee referral incentive is a forward-thinking arrangement.
    1. The Employee Referral Incentive Program is administered by University Human Resources.
    2. A department must request and receive approval from University Human Resources for specific vacant positions and/or jobs that would be eligible for the employee referral incentive.
    3. The employee referral incentive payment will be 5% of the expected base salary of the eligible position with a maximum payout of $2,500.
    4. The department must follow the RC or campus approval protocol and obtain the required approvals.
    5. Prior to any communication to employees and implementation of the incentive for a specific vacant position and/or job, final approval must be received from University Human Resources.
  2. An eligible referring employee must submit an employee referral incentive validation form no later than  7 days after the referred applicant submitted their application within the University’s Jobs at IU website.
  3. The referred applicant must:
    1. submit an application via Jobs at IU;
    2. identify the referring employee within the Jobs at IU website when applying for the position;
    3. be hired in a position eligible for the referral incentive; and
    4. not be a current University employee
  4. The new hire must complete 6 months of employment in the eligible position or the evaluation period, whichever is longer; and be in good standing with the department.
  5. The employee referral incentive payment is a one-time payment issued to the referring employee after the new hire meets the above requirements.
General Guidelines
  1. Eligible employees may receive more than one incentive payment for different positions per fiscal year if the referrals are hired and meet the program requirements.
  2. The referred applicant must identify one eligible referring employee.
  3. The employee referral incentive may not be split between multiple employees.
  4. All employee referral incentive payments must be approved by University Human Resources before communicating the payment details to the employee.
  5. Approved payments to Staff employees should be initiated by the campus, school, or division/department through the Additional Pay e-Doc process and include within the e-Doc:
    1. The completed Employee Referral Incentive Validation Form.
    2. Reference the employee referral incentive eligible position number and job listing number
    3. Confirm that the required employee referral incentive requirements have been met
  6. Employee referral incentive payments are included in calculating overtime pay.
Back to top
Violations of university policies will be handled in accordance with applicable university policies and procedures which may include disciplinary actions up to and including termination from the University.
Back to top
Additional Contacts
Tax Withholdings
University Tax Services
Back to top
January 2019
Updated references to the online application system (OLA) to the Jobs at IU website.
June 26, 2015
The language in Procedures was clarified and the Employee Referral Incentive Validation form was updated.
Back to top
Related Information
Appendix: Eligible Jobs and Positions
Reward and Recognition Plans
Employment HR Policies
Payroll and Tax Withholding
Jobs at IU
Related Forms
Employee Referral Incentive Validation Form
Accessibility | Privacy Notice
Copyright © 2021 The Trustees of Indiana University