Experts and cynics regularly disagree on what methodologies will best serve South Africa in tackling the spiraling rate of unemployment, especially amongst young people of employment age. However, one recurring assertion they seem to share in common is the belief that only by creating a conducive environment for entrepreneurship and sustainable businesses to thrive, will the country be able to manage this challenge that has been a sore thorn for decades.
The audacious YES Initiative, launched earlier this year by President Cyril Ramaphosa, is government’s latest show of commitment to collaborate with corporate SA, labour and civil organizations to create at least a million permanent job opportunities for the country’s youth. In heeding the call, IBASA’s recent agreement with strategic partner GrowthWheel is primed to encourage accredited Business Advisors to promote the importance of the Y.E.S. Initiative amongst their clients, and further inform them of how they can participate in it. But how exactly will this work? Brace yourselves for some crucial bedtime reading around legislative parameters in that regard.
On the 12th October 2018, the Department of Trade and Industry (DTI) published a Practice Note1 under Gazette 41975 to give clarity on how to implement the YES Initiative that was gazetted on the 28th August (Gazette 41866). Highlights of the Practice Note are as follows:
- The Youth Employment Service Initiative is now implemented and in force for entities of all sizes.
- The YES Initiative is extended to the Sector Codes. This will exclude the Transport Sector since YES sits within Statement 000 of the Amended Codes of Good Practice and the various Transport Sector Codes are still based on the Old Codes.
- All YES Entities need to register with the YES Non-Profit Company via their website yes4youth.co.zato achieve enhanced B-BBEE recognition. Registration fees for different service levels are provided on the website. The fees include the provision of a cellphone for each YES employee to provide reporting, e-learning and other services.
- A YES entity must maintain or improve on its previous B-BBEE level to participate. Where there are specific factors that make this impossible, such as a downturn in business or a large supplier failing to maintain its B-BBEE level, entities may engage with the DTI B-BBEE Policy Unit with justifiable evidence for participation.
- Absorption is as defined in the Amended Codes Of Good Practice and can only take place after 12 months of workplace experience; or if it can be identified earlier during a B-BBEE verification exercise. However, due to differing Measured Periods, the Absorption Target will not apply during the first year of YES implementation.
- The workplace experience being provided must be for 12 months and can be counted as long as 8 months is achieved. If any YES employee falls out, the entity has 1 month to replace the employee.
- The workplace experience cannot be a Learnership, Internship or Apprenticeship so as to avoid double counting. The YES initiative is in addition to the Skills Development Learnership targets. However, YES entities are able to claim 50% of their Skills Development Spend for YES employees as informal training (Cat F and G) under the Skills Development element.
- EME’s or 51% Black Owned QSEs who register as YES entities will have to be verified by a SANAS accredited Verification Agency under the relevant QSE scorecard if they wish to take advantage of the YES initiative. However, EMEs or QSEs can become host entities for youth employees taken on by other YES entities. This dynamic is an important factor in the roll out of this initiative.
- Black youth being employed under YES must be unemployed at the time.
- Eligibility based on Priority Element compliance will be calculated as follows:
– Generic: Current sub-minimum targets or an average of 50% across all three Priority Elements being 34 points; or 50% equivalent in various Sector Codes.
– QSE: Current sub-minimum targets i.e. Ownership plus 1 other; or 40% of Ownership and Skills Development being 13.20 points; or the Sector Code equivalent; or 40% of Ownership and Enterprise and Supplier Development being 15.20 points; or the Sector Code equivalent.
* YES targets for Generic entities will be the greater of:
– 1.5% of the YES entity’s headcount at the end of the preceding year. i.e. the last
day of the measured period.
- 5% of the YES entity’s average NPAT in the immediately preceding three years, converted to headcount by dividing the average by R55, 000. Where there is an average loss, the NPAT provisions that apply to SED and ESD will apply.
- The target provided in Table 1 of Gazette 41866:
- Public and Specialized Entities may participate with no sub-minimum requirements.
- Where an entity has no NPAT (NPO’s, etc) or has not traded for three years, then the target is the higher of the 1.5% of headcount or the relevant Table.
- YES targets for QSE’s are based on Table 2 of Annexure B in Gazette 41866.
- This Gazette lays down specific verification requirements for enhanced B-BBEE Recognition of YES entities.
Members are encouraged to take advantage of these incentives to ensure that compliance will deliver good returns for their businesses, their clients’, and most importantly, for the country at large.