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THE DIFFERENCE ONE YEAR OF WORK EXPERIENCE MAKES IN ONE LIFE!

 

Just one year of work experience, combined with a CV and employment letter, triples the chances of future employment of prospective youth candidates. 

 

President Cyril Ramaphosa has set about to improve youth unemployment by launching the Youth Employment Services (YES) Initiative which aims to create more than one million paid internships for black youth over three years.  This is a business led collaboration with government and labour. 

 

Entities need to create new one-year positions for unemployed youth over and above current employment numbers.  Entities and eligible employees are subject to the basic conditions of employment.  This entails:

• Signing of a 12 month fixed term or temporary employment contract; 

• Ensuring a ‘quality work experience’  is provided insofar as the entity is able to provide such;

• Clear communication upon termination of the contract.  The minimum paid stipend is R3 500 per month.

 

The Entity has an option to sponsor the salary for a one-year starter position at a black owned SMME (QSEs and EMEs) which allows the larger company to qualify for B-BBEE recognition, while building SMME capacity and competitiveness.

 

Qualification for registration for the YES Initiative (Scorecard entities):

 

Generic Entities with total revenue above R50 million per annum must-

• Achieve at least the 40% sub-minimum under the priority elements (ownership, skills development and Enterprise and Supplier development); OR

• Achieve an average of 50% across the three priority elements

• The DTI has decided to delink the 2.5% Bursary spend as a precondition of participating with the YES Initiative.

 

QSE Entities with total revenue between R10 million and R50 million per annum must-

• Achieve at least 40% in two of the three elements, with ownership being one of the two elements; or

• Achieve an average score of 40% across two priority elements, with ownership being one of the two elements

 

EME Entities with an annual total revenue below R10 million per annum have no sub-minimum eligibility requirements.

 

By meeting the YES targets, the company will be able to claim points under Skills Development and Enterprise & Supplier Development.  YES Entities must ensure that they maintain or improve the B-BBEE Status Level and performance against the targets under the overall Scorecard obtained the previous year before participating in the YES.

 

The headcount target for Generic Entities for the YES initiative is the greater of the following:

• 1.5% of the YES entity’s headcount in the preceding year; OR

• 1.5% of the YES entity’s average Net Profit After Tax (NPAT) from the preceding three years, converted to a headcount number by dividing that NPAT number by R55 000.00; OR

• A target as determined by the company total revenue band

 

TOTAL REVENUE BAND	MINIMUM BLACK YOUTH JOBS
50-75	6
75-99	7
100-149	8
150-199	9
200-249	10
250-299	11
300-349	12
350-399	13
400-449	14
450-500+	15

 

The headcount target for QSEs and EMEs for the YES initiative (for a full set out of the table refer to the proposed amendments): 

 

EME / QSE HEADCOUNT	YES YOUTH TARGET
1-19	1
20-39	2
40-59	3
60-79	4
80-99	5
100-119	6
120-139	7
140-159	8
160-179	9
180-299	10
200-219	11
220-239	12

 

The criteria for Youth Candidates for the YES initiative is as follows:

• Candidates must be between 18 and 35 years old; and

• Meet the definition of “Black People” as defined in the B-BBEE Act 53 of 2003 as amended by Act 46 of 2013, that is African, Coloureds and Indians who are citizens of the Republic of South Africa.

• A further incentive for businesses are that they can claim up to R1 000.00 per month in terms of the Employment Tax Incentive if they employ black youth between the ages of 18 and 29.

 

Enhanced B-BBEE recognition

 

Enhanced B-BBEE Recognition for scorecard entities are possible by reaching and exceeding the targets in respect of the YES initiative:

• Achieving the YES Target and 2.5% Absorption of candidates with job placements, will enhance the entity with 1 B-BBEE Recognition level up on the Scorecard

• Achieving 1.5% of the YES target and 5% Absorption  of candidates with job placements, will enhance the entity with 1 B-BBEE Recognition level up on the Scorecard and add 3 bonus points on the overall scorecard

• Achieving double the YES Target and 5% Absorption of candidates with job placements will enhance the entity with 2 B-BBEE Recognition levels up on the scorecard

 

Informal skills development spend for the YES Initiative

Entities will be able to claim up to 50% of their Skills Development Spend on YES employees for Informal Training (Category F and G of the Skills Development Matrix) against the Skills Development Scorecard.  Category F and G are occupationally directed informal instructional programmes and work based informal prorammes. 

 

Conclusion

The proposed amendments clearly shows that the focus of black empowerment has shifted from black ownership to black employment and development.  Government is incentivizing the private sector to participate through rewarding companies with higher B-BBEE scorecard recognition and the Employment Tax Incentive in order to alleviate the unemployment statistics for black youth.  The public commentary process has closed and we await the outcome of this process.

 

Contributor:  GRETCHÉN ANKER (Senior Associate) (Labour & BEE) (Umhlanga Office)

E-mail:  gretchéna@tmj.co.za

Tel:  031 566 2207