The obvious and most beneficial outcome is youth employment and a resultant lower unemployment rate in South Africa as referred to in the Code of Good Practice (Gazette Number 41866 dated 28 August 2018) as mentioned below:
“The Youth Employment Service (Y.E.S) Initiative is to provide for, and institute, Broad-Based Black Economic Empowerment (B-BBEE) Recognition for Y.E.S Measured Entities and qualification criteria applicable to, the B-BBEE Recognition for Job Creation.”
Y.E.S allows for an increased recognition of informal spend on the Skills Development scorecard. Companies involved with Y.E.S can claim up to 50% of their Skills Development spend on informal training (categories F and G).
The benefits for compliance with and exceeding targets are:
• Achieving the Y.E.S target and providing jobs for 2.5% of candidates in your company or pay salaries for candidates placed in SMEs enables one B-BBEE level recognition increase.
• Achieving 1.5 times the Y.E.S target and 5% placement as above, provides a one level increase plus an extra three points on the whole scorecard.
• Achieving twice the target and 5% placement as above allows a 2-level jump on the scorecard.
Due to the uptake and difference in Measurement Periods for Y.E.S Measured Entities, the Target for Absorption will not be verified for B-BBEE Recognition during the first year of implementation of the Y.E.S initiative. Instead, the target for this will be verified when absorption takes place in the following Measurement Period. Absorption is based on the Y.E.S Entity’s Target.
Keep in mind the qualifying criteria for eligible employees:
• are between the ages of 18 and 35; and
• meet the definition of “Black People” as defined in the Broad-Based Black Economic Empowerment Act 53 of 2003 as amended by Act 46 of 2013.
Companies must verify that they meet certain criteria on the scorecard to be eligible for the Y.E.S programme. Note that the principles of the Employment Equity Act where applicable may apply too. This includes Employment Equity Reports EEA1, EEA2 and EEA4 and these reports may be used during the verification process.
Companies of more than R50 million turnover per year (‘generic entities’) are required to meet sub-minimum requirements on the Priority Elements of the scorecard, being Ownership, Skills Development and Enterprise and Supplier Development (ESD) “Priority Elements” or achieve an average of 50% across all three of these Priority Elements.
Companies with a turnover of between R10 million and R50 million annually (QSE’s) must achieve an average of 40% performance across two of the three Priority Elements, one being Ownership.
Companies with a turnover of less than R10 million per year (EME’s) need not comply with any of these pre-requisites.
Amendment to Code Series 300: Special target for bursaries
The amendment to the Skills Development Code ensures that part of the 6% of leviable amount target for skills development spend on black people is spent on fully inclusive bursaries for black people. This is done by setting a 2.5% of leviable amount target for 4 points and there is no cap on costs such as accommodation, catering and travelling whereas there is a 15% cap for all other training. Companies must also achieve full points for this new aspect to be able to qualify for the Y.E.S initiative. This amendment could result in unlocking funding to assist Government in providing free education at tertiary level.
Author Craig Tonkin