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Youth Employment Service (YES) initiative and B-BBEE

The Youth Employment Service (YES) initiative was recently gazetted with immediate effect. This is a significant piece of B-BBEE legislation that might change the B-BBEE landscape. YES is a business-driven initiative but also a partnership with government and labour in collectively finding workable solutions to South Africa’s youth unemployment dilemma. The YES initiative aims to create one million jobs for youth.

In simple terms, the YES initiative enables business enterprises to enhance their B-BBEE levels with one to two levels if certain youth job creation targets are met. The YES initiative is applicable to both the Dti Codes of Good Practice and all promulgated Sector Codes.

THE BENEFIT
Business enterprises can enhance their B-BBEE recognition level by:
1 level for meeting the YES target and 2.5% absorption; or
1 level +3 points for meeting 1.5 x the YES target and 5% absorption; or
2 levels for meeting double the YES target and 5% absorption.

CALCULATION OF YES TARGET
The YES target is based on the HIGHER of the results of the following 3 formulae:
5% of headcount (total employees); or
5% of average Net profit after tax over the last 3 years / R55 000; or
as determined by a prescribed table (based on annual revenue) – for Generic enterprises, the minimum target will always be six participants.

WHO WILL QUALIFY AS YES PARTICIPANTS?
Eligible participants under the YES initiative are people that meet the definition of black people (South African Coloured, Indian and African persons) between the ages of 18 and 35. Only black youth who are unemployed at the time of registering with the programme will be acknowledged as eligible employees. They must benefit from 12 months’ full-time, quality work experience, which will be monitored by Yes4Youth to ensure a consistent national standard. These jobs must be created in addition to the existing staff compliment of the business. Where the measured entity is unable to create sufficient new jobs, they may sponsor qualifying new jobs in other EMEs or QSEs.

TO QUALIFY FOR REGISTRATION UNDER THE YES INITIATIVE:
Generic enterprises must meet the 40% sub-minimum requirements of the three Priority Elements or achieve an average of 50% across these Priority Elements instead;
QSEs can either achieve the 40% sub-minimum requirements for the Ownership and one more priority element or achieve an average of 40% across the two Priority Elements;
Both Generics and QSEs must ensure that they maintain or improve on their B-BBEE status level achieved in the previous year;
EMEs do not have to meet any specific requirement.

It should be noted that this Gazette does not change Priority Element compliance requirements whereby missing a 40% sub-minimum requirement results in the loss of a B-BBEE Level. However, an entity can now regain that level under the YES initiative and indeed achieve a further level through greater YES performance. Therefore, the loss of a B-BBEE level through not meeting black ownership requirements can be overcome through the use of the YES initiative.

SIX STEPS TO YES BENEFIT
Step 1: Register on the website: (yes4youth.mobi/register)
Step 2: Pay registration fee;
Step 3: Decide where YES participants will be placed (example: inside your business, at another EME / QSE);
Step 4: Recruit your YES participants and upload their details onto the YES upload site – pay the per participant registration fees;
Step 5: Submit participant and supervisor data – Participants will need to fill out progress surveys every few weeks (on a provided smartphone app) – supervisors will need to do it every three months;
Ensure the collection of relevant records required by B-BBEE verification agencies. This includes: the YES registration certificate, certified copies of IDs of placed youth, payslips and 12-month contracts, proof of unemployed status at the commencement of the programme.

While there are a lot of positives to the YES initiative, it could be a very expensive and onerous initiative with some unintended consequences. It is critical that companies have the technical expertise and knowledge they need to implement YES successfully. They will need to establish how to manage YES from an industrial relations perspective. It is necessary to consider both employer and employee expectations. Businesses that implement YES initiatives every 12 months will need to increase their budgets in line with their increased payroll to achieve their skills development targets.

• CHARTERIS & BARNES | www.cbarnes.co.za