B-BBEE Act, as amended
B-BBEE Codes of Good Practice, as amended
In this article, we briefly discuss Skills Development and how it is utilised and measured for B-BBEE purposes.
As with all BEE elements, the use of proper record keeping is highly essential to ensure that the BEE audit is concluded without unnecessary delays and hiccups.
Skills Development for B-BBEE purposes is simply measured as the expenditure incurred by a company versus its annual payroll cost (expressed as a percentage).
Skills Development is a priority element to comply with in the Broad-Based Black Economic Empowerment (B-BBEE) Codes. The Scorecard encourages corporates to aim for a minimum of 40% contribution to Skills Development to attain or retain the best possible BEE level.
NOTE: Mandatory Sectoral Training expenditure is not a Skills Development contribution on the Generic Scorecard. Legislation prescribes Mandatory Sectoral Training which instructs an organisation to meet specific non-negotiable requirements such as Occupational Health and Safety Regulations. These requirements may not be used for Skills Development measurement purposes.
The revised B-BBEE Scorecard gazetted on 31 May 2019 and implemented in December 2019 enables companies to earn the maximum Skills Development points if they spend the required 3% (QSE Scorecard) or 6% (Generic Scorecard) of their annual payroll on training.
A brief summary of the changes are listed below. To fully understand these changes, the reader is advised to consult Gazette 42496 for the full description of the requirements. The Gazette may be found here: https://beeratings.com/wp-content/uploads/2019/06/Government-Gazette-Number-42496-31-May-2019-Amended-Code-of-Good-Practice-B-BBEE.pdf
- Spend on bursaries for black students attending higher Education Institutions has been introduced with a target of 2.5% leviable amount and 4 weighting points.
- Weighting points for overall Skills Development expenses have been reduced from 8 to 6 points.
- Category F & G no longer capped at 15% but at 25%, however, travel & accommodation remains capped at 15%.
- The indicators for Employed & Unemployed learnerships have been combined.
- The weighting points for Employed & Unemployed learnerships have been reduced from 8 to 6 points.
- No double counting allowed between Skills Development Expenditure on Learning Programmes specified in the Learning Program Matrix for black people and Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions.
- Stipends linked to bursary programs now a legitimate learning cost. This was previously limited to Category B,C & D programs.
- Definition for a bursary or scholarship scheme now specifically includes costs for funding for subsistence or accommodation during the period of study.
- Training Manager’s salary cannot exceed more than 15% of the total value of Skills Development Expenditure.
The defined categories of Skills Development are:
A. Bursaries or Scholarships
D. Learnerships or Apprenticeships
E. Work Integrated Learning
F Informal Training (Occupationally directed informal instruction programmes)
G. Informal Training (Work-based informal programmes)
When being evaluated the following is applicable:
a. The nature of the training course as to whether it is theoretical, practical or both.
b. The method for both theory and practical training.
c. Information about the facility or environment where training takes place.
d. A description of the accolade a Student or Learner achieves on concluding a specific training intervention.
e. Scorecard Recognition of the total allowance for each training intervention that must reflect all exclusions apply to each category.
NOTE: All forms of international training will only be recognised as a contribution if it meets the requirements of The South African Qualification Authority (SAQA) or a similar body outside South Africa.
Please also read our previous article “Code Series 300: Skills Development” dated 27 November 2019 for additional detail too.
Author Craig Tonkin