“I’ve taken note of the new Youth Employment Service initiative issued by Government and am very excited about the opportunities it offers to improve the BEE level of my business. I am however struggling to understand what I need to do to contribute and benefit from this. Can you help explain more?”
On 28 August 2018 the Youth Employment Service Initiative (“YES. Initiative”) within Code Series 000, Statement 000 of the Amended BEE Codes of Good Practice was published in the Government Gazette and became effective immediately.
The YES Initiative is an initiative between Government, organised labour, civil society and young persons with the aim of creating jobs for youth. There is currently an estimated six million young persons in our country who are unemployed and the YES Initiative aims to address this unemployment by creating at least 1 million new jobs.
Youth is defined as persons between the ages of 18 and 35 and the YES Initiative is aimed specifically at creating opportunities for them by setting targets for entities for the creation of one-year paid positions with a minimum paid stipend of R3,500.00 per month.
Targets are set for the creation of new jobs for youth as well as their absorption (i.e. appointment). The jobs can be created within an entity itself or an entity may sponsor new jobs to be placed in EMEs or QSEs. The targets for job creation are linked to the turnover of the business with different requirements set for EMEs, QSEs and Generic entities as well as different methods of determining their targets.
EMEs have no sub-minimum requirements and need only meet their targets based on headcount as set out in the YES Initiative.
QSEs must however meet the 40% sub-minimum requirements for Ownership element and one of the other two priority elements or have an average of 40% for the Ownership element and another priority element. They must also then meet specific headcount targets based on the same table as for EMEs.
Generic entities must meet the 40% sub-minimum for all three priority elements or alternatively they must average 50% across the three priority elements. They then also have to meet the higher of the following targets:
- 1.5% of their headcount; or
- 1.5% of their average Net Profit After Tax (“NPAT”) for the last three years after their NPAT has been divided by R55,000; or
- A specific headcount target determined by a table in the YES Initiative.
Importantly, all entities will have to ensure that they maintain or improve their BEE level in order to benefit from the YES Initiative.
If entities meet the requirements as well as their targets they will be enhanced by a level on their BEE scorecard and if they meet the requirements and double their targets they will be enhanced by two levels.
There is still some uncertainty regarding the implementation of the YES Initiative but according to their website, https://www.yes4youth.co.za
, a practice note, which should contain the verification details necessary to implement the Y.E.S. Initiative, will be released within the next few weeks. There is currently speculation that this practice note might do away with the absorption targets for the first year in order to encourage entities to take part in this initiative and gain an immediate advantage. We will, however, have to wait for the practice note to be published for clarity on this point.
The YES Initiative can make a significant difference not only to the BEE levels an entity can now potentially achieve but also be impactful on the lives of youth who can now through this initiative be provided an opportunity to obtain workplace experience as a vital element to starting their careers.
Our advice is to seek the assistance of a BEE or skills development specialist to help you plan and identify the targets your business will need to meet to contribute and benefit from the YES Initiative.