Are employees paid any commission if they refer the candidate for their organization? Is it legal?

In my organization, one of the employees has referred his friend to our company. The organization is paying him extra money as incentive for referring a candidate to the organization. Can the company do that? Is it legal?

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YES company can do this.They can pay employees incentive for refrerring a candidates to the company.
This is legally allowed.

When a company hires a candidate, it needs to advertise for the jobs or ask the placement agencies to search candidates on its behalf.
Both the ways involve costs.

So Company asks its employees that they bring in their friends or refer them to company for jobs.
If they are slected and they join and start working, they will be paid certain amount of Money.

The money that company saves by not placing Ads in Newspapers or paying the placement agencies is paid to the employee who brings a candidate and who is selected.

Employee referral program is the initiative of the organisation to enhance the friendly work environment. You can refer your friends and earn referral bonus but it depends on your company policy and norms of the organisation. They also decide how much amount it to be provided to the employee. You can check that with the HR and refer your friends and earn bonus. It is legal and based on company norms.

Dear Friend,

Yes getting/providing incentives on employee refferal is completely legal.
Now a days in order to balance the expenses on hiring most of the company's are formulating employee refferal scheme, as this cut down the cost of advertising, consulting and other hiring expenses.

Dear Aspirant,

Many things happens orally & without any record.In such case we can not do any thing even if it is illegal.If some one refers some one to any company for job & one earns money in lieu of that.It may not be in record to take action in this regard.Of course many consultancy is being run to refer candidates for job & consultancy is earning a lot.So it is nothing wrong to earn money in lieu of refering some one for job.

Thanks.

Hello friend,
yeah definitely employees get commission if he refers good employees to the company and that depends on the performance of that candidate during trainning period.once he completes His training successfully you will get your commission credited to your account.
these type of recruitment is called Buddy walk in where one of your Friend fresher or Experienced will appear interview and in referal he will give your Company ID in his resume.

thank You.