Consider this before implementing Yes

2019-04-24 06:01
Marc Naudé

Marc Naudé

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Question:

I am considering supporting the Youth Employment Service initiative, announced last year by the government, to help improve the BEE level of my business.

However, I am struggling to find more information on how it works and how to get started.

Can you help?

Answer:

On 28 August 2018, the Youth Employment Service (Yes) Initiative was published within Code Series 000, Statement 000 of the Amended BEE Codes of Good Practice and became effective with immediate effect.

In short, the Yes Initiative is aimed at creating jobs for South African youth by incentivising entities to help create such jobs in return for benefit on their BEE scorecard.

In this instance, youth are defined as people aged 18 to 35.

The Yes Initiative sets targets for the creation of new jobs for youth, as well as their absorption.

If entities meet the various requirements and targets, they can be enhanced by a level on their BEE scorecard.

If they meet the requirements and double the targets, they can be enhanced by two levels.

Initially, after its publication, there was a large degree of uncertainty regarding the implementation of the Yes Initiative.

This led to a practice note being published on 12 October 2018, which helped to clarify a number of issues, but still left certain areas uncertain.

On 23 January, the South African National Accreditation System, in consultation with the Department of Trade and Industry (DTI), published a list of questions and answers to deal with the remaining uncertainty.

The main points clarified are as follows:

  • An entity wishing to participate in the Yes Initiative must be registered with the Yes non-profit company.
  • Entities must maintain the BEE level they had prior to participa­ting in the Yes Initiative. If their level drops, they may engage with the DTI’s BEE Policy Unit and try to justify the drop in their level.
  • Absorption is not mea­sured for the first year after the implementation of the Yes Initiative.
  • A Yes Initiative employee cannot be placed on a learnership, apprenticeship or internship programme for BEE purposes.
  • Small exempt micro enterprises (EMEs) and Qualifying Small Enterprises (QSEs) cannot make use of the enhanced BEE levels obtained from the Yes Initiative to improve automatic levels. They need to go through a full QSE verification in order to benefit from the initiative.
  • The employee headcount at the end of the last financial year is used to determine the targets for the Yes Initiative.

Although the clarifications provide more certainty, some of these clarifications may affect businesses considering the Yes Initiative, particularly if the business is an EME and QSE with automatic level recognition.

These entities would now have to deal with the administration and costs involved in undergoing a full verification, and if they fail to achieve the same BEE levels they receive automa­tically, they would be unable to benefit from the Yes Initiative. This would pose quite a risk for such entities.

However, should you wish to consider the Yes Initiative, it would be useful to visit the website at www.yes4youth.co.za, or to seek the assistance of your BEE advisor. – Marc Naudé, senior associate, Phatshoane Henney Attorneys

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