The Department of Trade and Industry (DTI) is seeking public comment on the proposed amendments to the Broad-Based Black Economic Empowerment Amendment (B-BBEE) Codes of Good Practice.
Once finalised you will have one year to embrace these significant changes. As the Employer Association for the Contact Centre Sector it is our obligation to ensure that you are exposed to these changes and have the opportunity to consider and agree to our sectoral input.
The DTI say that the proposed amendments aim to promote innovative ways to increase the participation of black South Africans and in particular black youth in the economy. Key to the amendments is the Youth Employment Service (Y.E.S) initiative and the introduction of a ring-fenced point indicator on the skills development scorecard for a 2.5% spend target on bursaries for black students attending higher education institutions. Essentially, the proposal is that your existing 6% spend is increased to 6.3% and divided now into three ring-fenced components namely 3.5% for what you traditionally have spent your 6% on, 2.5% for University Bursaries, and a 0.3% spend on Disability Training. In addition, within the first 3.5% you can now spend 25% instead of the original 15% on unregulated and unaccredited interventions which the CCMG embraces and encourages as Sectoral Group Training. The department said the introduction of the ring-fenced 2.5% target for skills development expenditure on bursaries for black students at higher education institutions is a critical intervention to enable the raising of funds for the education of needy and deserving black youth.
The Y.E.S initiative was one of the initiatives presented in the 2018 state of the nation address by President Cyril Ramaphosa. The Y.E.S initiative aims to improve the grim employment outlook for young jobseekers by offering work opportunities and therefore inclusion in the economy. Its policy effectively allows companies doing the right thing to jump one and sometimes two BBBEE Levels. It promises to become the annuity gift of BBBEE that keeps giving.
Both the above-highlighted changes are critical policy revisions that are deliberately targeting youth empowerment initiatives through work opportunities and critical skills development.
Preliminary comments received since the gazetting of the codes on March 29, 2018, indicate concerns regarding the proposed qualification criteria “18.104.22.168”, which requires entities to score full points on the 2.5% target for skills development expenditure on bursaries in order to qualify for Y.E.S BEE recognition.
The DTI views the participation in Y.E.S to be in line with the objectives of B-BBEE policy and has keen interest that there be maximum impact resulting in empowerment of young South Africans. In order to create certainty and ensure rapid take up in the Y.E.S, DTI are considering delinking the Y.E.S and the Bursary target of 2.5%,and are looking for Sectoral input in this regard.
This means that the bursary contributions will not be a precondition to obtain BEE recognition as a Y.E.S participating entity.
Understanding the BBBEE Amendments out for comment by 29 May 2018
How will the Employment Tax Incentive and the Youth Empowerment Service (YES) work together?
An additional concern relating to the BBBEE Amendments – The linking of the 2.5% of Skills Spend on Higher Education Qualifications to the YES Targets
BBBEE Amendment Codes for Comment April 2018 (Government Gazette)