As Khatovar said + you can confirm you are linked in your battle.net - you can also check when you're grouped that if you right click on the referee that the option "grant a level" shows up in the menu

Lastly for # of levels : you can grant you first level when you reach level 2 and 1 more every 2 levels after that - up to a maximum of 39 (and not 40 as documented/expected)

Given it takes a lot more xp around 80 than around 1 - you probably want to grant your levels to a high level character
Typically you want for each pair - that the grantee reach 80.99 (last granted level the grantee is 79.99 and the grantor is 80.01; which can then grant 1 last level and make the grantee almost level 81 )