With the recent headlines reading “BEE will not be scrapped” I think this is the best time to reconsider Broad-Based Black Economic Empowerment (B-BBEE) and the impact it has on organizations. Although the ripple-effects of apartheid can still be felt today through disparities due to the former education system, great strides have been made in the transformation arena addressing unemployment and economic inactivity in the country. The youth unemployment rate currently sits at an alarming percentage and it has been identified as to why it is imperative to now focus on work-based initiatives towards this target group.
In order to make provision for the unemployed youth, the Youth Employment Service (Y.E.S.) Initiative was conceived. The Y.E.S. Initiative aims to address the lack of workplace experience, by encouraging entities to provide an initial opportunity in the labour market.
The Youth Employment Service Initiative was gazetted on the 28th of August 2018 by the Minister of Trade and Industry, Dr. Rob Davies, and has become encompassed into the B-BBEE landscape. This crucial amendment now affords qualifying employers to now benefit from the Y.E.S. Initiative through enhanced B-BBEE status levels.
Key points to consider-
Qualifying criteria for the Initiative:
For Generic Entities: Sub-minimum is 40% or Average of 50% for Priority Elements
For QSE Entities: Sub-minimum is 40% or Average of 40% for Two Priority Elements with Ownership being mandatory
The Measured Entity must ensure that they maintain or improve on the BEE status level achieved in the previous year.
An EME does not have to meet any specific requirement.
Y.E.S. Targets for Generic entities are the higher of:
1.5% of the entity's headcount or
1.5% of the entity's average NPAT in the last 3 years
The targets provided in a table based on revenue range from R50m = 6 youths to R500m = 15 youths.
Targets for QSEs & EMEs are based on headcount ranging from 1-19 = 1 youth to 799 = 40 youths.
Eligible individuals to be hired under the YES Initiative are black people between the ages of 18 and 35. They must benefit from 12 months full-time quality work experience and these jobs must be created in addition to the existing headcount. Where the measured entity is unable to create sufficient new jobs, they may sponsor qualifying new jobs in EME’s or QSE’s.
The benefit of utilizing these YES provisions is that the B-BBEE Recognition Level of the Measured Entity can be enhanced as follows:
Achieve YES target + 2.5% absorption of the youth: 1 Level
Achieve 1.5 x YES target + 5% absorption of the youth: 1 Level + 3 bonus points
Achieve 2 x YES target + 5% absorption of the youth: 2 Levels
The loss of a B-BBEE level through not meeting ownership requirements can now be overcome through the use of the YES initiative.
This amendment will create a significant opportunity for employers to maximize their B-BBEE status levels and to encourage them in sponsoring new jobs. This initiative will definitely give rise to increased job creation and will result in increased economic growth. The Y.E.S. Initiative is not only going to benefit the lives of the youth but also change the landscape of the South African labour market.
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