My wife has correctly pointed out that my cynicism is not in anyone's best interests. I'll see if I can temper it.
As you might or might not know - our man in Meintjies Street published the YES code recently. He was under a fair amount of pressure to get this done - and again I take heart that national issues took priority here. The minister only published the YES, the other proposed amendments remain on ice.
As we have to come to expect (oops the cynicism creeps back) from the dti - it's big on lofty ideas but short on ANY detail. The purpose of this blog post is to clear up the lack of information and tell you how to go about qualifying for it in a series of short steps.
1) What do you need to do to qualify
- You need to achieve the 40% sub-minimum under all three priority elements if you are a large enterprise. QSEs need to achieve the 40% sub-minimum for ownership and one other priority element OR
- You need to achieve an average of 50% of the points under the priority elements for large, QSEs must make 40%
- You need to maintain or improve your BEE level year on year
2) What are the targets
The attached spreadsheet attempts to help you with your targets. The targets for large companies are the following - the higher of
- 1.5% of the Y.E.S Measured Entity’s headcount in the preceding year; OR
- 1.5% of the Y.E.S Measured Entity’s average Net Profit After Tax (NPAT) from South African operations in the immediately preceding three years, converted to a headcount number by dividing that NPAT number by R55,000; OR
- a target as determined in Table 1 - Annexure A.
QSEs follow the table in Annexure B
3) Getting started
- You need to go to the Yes4Youth website and register. I don't know what happens after you register but I'm sure you'll get an email from them. I am willing to bet that the verification agencies will want proof of registration.
- You need to create NEW jobs for NEW people. You can't put existing people in new jobs. On this point - it is likely that there will be some sort of an employee tax incentive (ETI) offered. The full ETI benefit can only be derived from new employment.
- If you can't create new jobs then you can place these people with other EMEs or QSEs. The YES code does not appear to say that these EMEs or QSEs need to be black-owned
- The positions need to be sponsored for a minimum of 12 months.
- The code does not require the use of the EAP when it comes to the youth employed. They must be between 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
4) What do you get if you achieve the targets
Here's the incentive
| B-BBEE RECOGNITION | |
| Achieve Y.E.S Target and 2.5 % Absorption | Move 1 B-BBEE Recognition Level up on the Scorecard |
| Achieve 1.5 x Y.E.S Target and 5% Absorption | Move 1 B-BBEE Recognition Level up on the Scorecard + 3 Bonus Points to the overall Scorecard |
| Double Y.E.S Target and 5 % Absorption | Move 2 B-BBEE Recognition Levels up on the Scorecard |
5) When can you derive the benefit?
The code is silent here. I don't like using logic when it comes to the dti but in the absence of any clarity - which will never be forthcoming from the dti or the BEE Commissioner, I'll revert to logic.
The promotion is based on the employment of people for 12 months. When you see the term "absorption" it then seems that we are talking about a person being offered a permanent contract after 12 months.
Absorption
We are used to this term under skills - which could mean an extension of paying for studies or offering a fixed term contract after the completion of studies/learnership. The amendments talk of full time employment. However the YES absorption must be different. It can't be that you have to absorb 2.5% of the people on the YES programme. I think that the percentage absorption is linked to the total number of full time staff. If you have 100 staff then you would absorb 5 of them and double the YES target and you go up two levels.
6) What's missing
A lot of official clarity - but I think this blog post will clear that up. We need to know what the tax incentives are and the minimum wage requirements.
Already we have a plan to make use of the ETI to bring the costs of the programme right down and we have a company that is ready to start hiring on your behalf. We're ready to begin.
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