The Legal Stuff: Bonus Pools & Incentives As leaders, you train and motivate your team to achieve milestones and along the way you may want to add new and inventive ways to help them stay focused and achieve their next goal. However, there are important rules around providing incentives for these efforts. For example, Coaches may not ever provide a cash prize of any amount as a reward or incentive for achieving a Team Beachbody business goal. Similarly, for any permissible non-cash incentives you may offer to your downline Coaches, they may never be offered as a reward for any recruiting activity – i.e. “all of my personally sponsored Coaches who recruit at least two new Coaches in the month of September will earn a pair of Lululemon yoga pants.”
To offer a permissible non-cash incentive reward, it must be based upon something specific and finite, such as achieving a certain rank as of a specific date, and it must apply equally to all those at that reward level. For example, “all my Coaches who achieve the rank of One Star Diamond as of September 30, 2015 will receive a copy of a personal development book of their choice.” Again though, you may never offer non-cash incentive rewards as a recruitment hook, such as “sign up with me, and if you become one of my Diamond Coaches you can join me on an all-expense paid trip to Hawaii.” Finally, for any kind of incentive you are offering, the reward cannot be centered around your personally sponsored or downline Coaches holding or maintaining a rank as a means of specifically boosting or maintaining your own rank.
These days some of our Coaches like to offer an opportunity along the lines of the DietBet model, where their Coaches can buy in to participate in a cash bonus pool. If you are operating a business challenge where your Coaches can buy in to participate, please be aware that no pool can exceed $5,000 total in value, and the Coach hosting this business contest must clearly publish the rules to all eligible participants. Additionally, the entire pool must be paid out and only include the amounts that the Coaches buying into fund; this cannot be funded by the sponsoring upline Coach and the Coach sponsoring the pool cannot retain or use any of the funds from the pool.
We recognize that there are many competing interests out there and you have to always be inventive in keeping people motivated to keep pushing forward. That’s why we are here to help. So when you have further questions for ideas you have to incentivize your own team, or you just want us to give it the “sniff test” before you make announcements and spend resources, please reach out to the Compliance team any time to discuss any details and to ensure you running a great program that is compliant.