SINGLE BLOG ARTICLE

The Youth Employment Services (YES) amendments to the B-BBEE Codes were gazetted on Tuesday, 28 August 2018.

YES is a business-led partnership with government, labour, and civil society and aims to provide 1 million South Africans between 18 and 35 years with paid work experience over the next three years. The amendments will have significant benefits to organisations that integrate youth employment into their workforce and B-BBBEE strategies.

YES focusses on three areas where employment creation efforts are likely to have the greatest benefits and most immediate impacts, including:

  • The creation of new job opportunities in existing firms intended specifically for the youth
  • Promoting the capacity of SMME’s
  • Creating SMME’s through creative value chain initiatives and knowledge spill-over in collaboration with industry leaders

How to implement YES in an organisation

In order to benefit from YES an organisation must:

  1. Achieve a 40% sub-minimum on each of the scorecard elements or a 50% average across the three priority elements.
  2. Maintain or improve upon their B-BBEE level of the previous year.

Next, the organisation must employ youth to the extent of the higher of 1.5% of the previous year’s headcount, or 1.5% of their average NPAT from SA operations in the preceding 3 years divided by R55  000 to calculate the headcount number. Alternatively, organisations can make use of Annexure A Table 1:

Table 1 - Annexure A: Generis Entity Targets for YES

It is important to note that organisations must appoint youth on a Fixed Term Contract of at least 12 months, provide quality work experience, and comply with the National Minimum Wage. They must also communicate clearly with the individuals concerned whether their contracts will be renewed or if permanent placements are available.

The potential benefits of YES

When incorporated correctly, the YES initiative can help companies increase their overall B-BBEE score as summarised in the table below.

B-BBEE Recognition
Achieve YES Target and 2.5% absorption Increase of 1 level on B-BBEE certificate
Achieve 1.5 x YES Target and 5% absorption Increase of 1 level on B-BBEE certificate + 3 bonus points
Achieve 2 x YES Target and 5% absorption Increase of 2 levels on B-BBEE certificate

Concerns

We have several concerns with the gazetted document:

  • There are several similar employment/experiential schemes in operation, but this is the only one which receives B-BBEE benefits like the YES programme.
  • The draft for discussion made mention of registration for YES which raised several queries such as with whom are companies required to register, what verification and procedures will have to be performed, is the registration entity a public or private entity, and what are the fees? These are administrative-type questions, and the gazetted document is now silent on this issue.
  • The Gazette continues the Government’s focus on “new jobs”. The YES Candidates must be placed in new jobs, which precludes the use of internships and learnerships for such positions. Internships, by their nature give the intern the work experience that the programme desires. Finally, what companies are creating new jobs in today’s poor economy?
  • Companies who cannot create enough new positions in their headcount can sponsor new jobs at EME or QSE. There are a few concerns here:
    • How will the experience of these sponsored candidates be verified or monitored?
    • Companies are meant to ensure that the candidate receives a “quality work experience”. How are they to ensure this happens if these candidates are not on their premises?
    • What is meant by “quality work“ and how will it be verified?
    • What procedures need to be in place to ensure these candidates are not double counted?

If you have any questions related to this article or other B-BBEE matters, please contact me at richard@globalbusiness.co.za 

Richard Ryding

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