Last year, the Commission for Employment Equity issued their 18th annual report. One of its findings was that the pace of transformation was not where it should be. This is extremely disappointing given that it is 20 years after the coming into force of the Employment Equity Act. As such, the practice of transformation should be well entrenched. This lack of progress can be keenly felt in the youth unemployment rate which has not seen significant improvement in the last little while.
According to the Quarterly Labour Force Survey (QLFS) for the fourth quarter of 2018, the unemployment rate of South Africans between the ages of 25 and 34 was 38.9%. A significant number of unemployed youth have been without work for a year or more. The Youth Employment Services (YES) amendments, which amend the Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice, is a step towards changing this.
What is YES?
YES was gazetted in August 2018 and is a partnership between government, labour and civil society. Through this initiative, companies have the opportunity to maximise their B-BBEE points.
The aim is to provide paid work experiences to 1 million South Africans aged, between 18 and 35, over the next three years. The focus of this initiative is to:
- Create new job opportunities for the youth in existing companies,
- Develop the capacity of Small to Medium Enterprises (SMMEs), and
- Create new SMMEs.
Who can take part in YES?
All companies – even those which fall under the Sector Codes – may participate in YES. Specific qualifying requirements are that:
- Generic companies must meet the subminimums of all priority elements. In other words, they must not be discounted and the company must have attained an average of 50% across the three priority elements. This equates to eight points for Ownership + 20 points for Skills + 40 points for Enterprise and Supplier Development = 68 x 50% = 34.
- Qualifying Small Enterprises (QSEs) are required to:
- Meet the priority element in two of the priority elements, one of which must be Ownership, or
- Average 40% over two of the three priority elements, one of which must be Ownership.
- Exempt Micro Enterprises (EMEs) do not need to meet any subminimums.
If you decide to participate in YES, and qualify in terms of the above-mentioned requirements, there are a number of other obligations that you will have to meet:
- You will have to employ the Youth on a full-time contract which is at least 12 months long.
- While they are employed with you, the Youth need to attain quality work experience.
- Your company needs to comply with the National Minimum Wage.
What effect does YES have on my B-BBEE scorecard?
You decide to participate in YES, there are tangible improvements that you will be able to make to your B-BBEE Scorecard:
- If your company achieves the YES targets and provides employment for 2.5% of the YES candidates in your company, or if you pay for the salary of YES candidates placed with SMMEs, your company will progress to the next highest B-BBEE level.
- If your company achieves 1.5 times the YES targets and achieves 5% placement – as opposed to 2.5% as mentioned in the point above – your company will progress to the next B-BBEE level and will earn an additional three points over the entire scorecard.
- If your company achieves double its YES targets and achieves a 5% placement rate, your company will go up two B-BBEE levels.
The QLFS for the fourth quarter of 2018 reports that 34.2% of the unemployed have a matric. This means that there is a wide spectrum of people who are eligible to benefit from the opportunities that YES provides. In the spirit of transformation, I encourage you to take part in YES.
Global Business Solutions can help your organisation invest in youth and progress a B-BBEE level. To find out more, view our services here.