B-BBEE Frequently asked questions

Broad-based black economic empowerment (B-BBEE) legislation was implemented as a vehicle to effect socio-economic and structural change within the private and public sectors, as well as in the broader communities they operate. It is one of the methods through which a business can begin to totally transform. Strategic B-BBEE management offers businesses immediate and long-term benefits for those companies willing to embrace it with a holistic and innovative mindset. Good B-BBEE standing can open the door to new clients, contracts and funding opportunities and build a future-focused economic environment by helping address the socio-economic and structural inequalities.

The YES B-BBEE Level Up benefit is an element that sits outside of the B-BBEE scorecard, however, participation in YES and receipt of level up(s) is dependent on points on the scorecard. In other words, your business needs to be active in B-BBEE and meet certain sub-minimums in order to change lives and benefit. 

The following blog answers your pressing questions regarding integrating YES into your business goals (while levelling up your B-BBEE scorecard), the YES Gazette and all other B-BBEE & YES related questions you might have. 

Please find all statements & practice note details on link here.

Is YES NPC the only entity that a company can register with for B-BBEE recognition for job creation?

Yes, it is made explicit in terms of the Practice Note for B-BBEE recognition.

What happens if a company is unable to maintain or improve its B-BBEE level?

If at the time of B-BBEE verification, where all other elements have been assessed before awarding of YES B-BBEE recognition, it is identified that the YES measured entity has not maintained or improved their previous B-BBEE status level, they may approach the dtic B-BBEE policy unit with justifiable evidence for participation.

What is the B-BBEE status that needs to be maintained or improved by the company?

The B-BBEE status level that needs to be maintained or improved upon is the B-BBEE status level obtained in the first year of participating under the YES initiative before YES B-BBEE recognition. This will be the base B-BBEE status level for the second and subsequent years of participation under the YES initiative (i.e. Level 4, Level 5 etc.)

What are “new positions” and “new jobs”?

The intention behind YES is to create new, sustainable jobs. While no official measurement of this will take place, YES measured entities are expected to create 12-month quality workplace experiences for youth.

Can youth be employed on a part-time contract?

Youth must be employed on a 12-month, fixed term employment contract that complies with the labour legislation, including the LRA and the BCEA. A measured entity may apply the hours of work as per the sectoral determination the entity is regulated by.

Is a company obliged to use the employment contract template provided by YES?

An entity is not obliged to use the YES employment contract template. However, the employment contract must be a 12-month, fixed term employment contract that complies with the labour legislation, including the LRA and the BCEA.

What salary should a youth be paid per month?

Employers are required to comply with the Minimum Wage Act, 2018, the relevant labour legislation (including the LRA PN 1.10 and BCEA), as well as any sectoral determination the entity is regulated by. Employers should take consideration of internal salary scales when employing YES employees. For example, where the NMW is R23,19 for each ordinary hour worked, then a youth working 40 hours per week will be entitled to a salary of R4,020.

Employers should take consideration of internal salary scales when employing YES Employees.

What happens if the company enters into a contract of employment with youth within the financial year being verified, but the period of employment of the youth at time of verification is less than eight months?

There will be overlapping periods regarding the intake of youth at different points in time, as well as all YES measured entities having different financial year ends. In order to be eligible for B-BBEE recognition, YES Youth need to fulfil eight (8) months of work. Flexibility will be applied for the first year of uptake in order to drive participation. Entities will be able to receive B-BBEE recognition before a minimum of eight months have been completed. It's important to note that the uptake must take place in the financial year which is used for B-BBEE verification purposes. Furthermore, entities still need to follow through or else risk the potential of having B-BBEE recognition withdrawn.

What would qualify as unforeseen circumstances?

Unforeseen circumstances may include resignation, death or misconduct by the youth etc. Constructive dismissal will not qualify.

What do companies do in the case of maternity leave during the 12-month work experience?

In terms of BCEA, the youth is entitled to four months of unpaid maternity leave. In the four months of maternity leave, the company can use their default maternity policy or allow the youth unpaid maternity leave. The company does not have to extend the contract beyond the 12 months for the four-month maternity leave not worked by the youth. However, they still need to remain employed until the end of the contract. 

Can youth be absorbed prior to the completion of the 12-month employment term?

The workplace experience for eligible employees must cover a 12-month period. An eligible employee may enter into an employment contract (or simply an employment contract longer than a 12-month period) save that: 

• The eligible employee must still complete the12-month workplace experience on the YES initiative
• Absorption will only be measured after completion of the 12-month period of employment on the YES Initiative. If an eligible employee is on a permanent contract and;
• A measured entity’s YES target is calculated every 12 months and an eligible employee that has been absorbed will not count towards the measured entity’s new YES target
• YES B-BBEE recognition can only be awarded based on absorption targets after the 12-month contract is completed and not before the 12 months have lapsed

Can absorption be extended to youth establishing their own entity?

Yes.

If youth are being sponsored and placed at an SMME, which entity is required to absorb the youth in order to qualify for B-BBEE recognition? The sponsoring company or the hosting SMME?

Absorption is based on principles embedded in the Amended Codes of Good Practice. Absorption can occur within the YES measured entity, or any other entity. The responsibility rests with the YES measured entity to provide documentation that proves that absorption has taken place according to the prescribed targets set out in the Gazette. 

What is the consequence for B-BBEE recognition if neither the sponsor or the SMME absorb the youth?

YES measured entities still need to follow through, or else risk the potential of having B-BBEE recognition withdrawn. 

If youth are employed as part of a learnership, internship or apprenticeship, can the same youth qualify as part of a company’s YES target headcount?

No. The youth in such a scenario would not be unemployed and as such does not qualify for YES registration. Also, no double counting.

Can youth employed as part of a company’s participation in YES also participate in a learnership, internship or apprenticeship?

No. The Practice Note is explicit regarding this. Initiatives for YES are separate from learnerships, internships or apprenticeships. No double counting is permissible.

PN 1.9: The 12-month workplace experience is not a learnership, internship or apprenticeship programme.

What does full-time employment mean? 

Fulltime employment refers to employment that has no defined end.

If youth are employed as part of a learnership, internship or apprenticeship can the company convert the youth to count as a YES Youth?

No. the Practice Note is explicit regarding this. Initiatives like YES are separate from learnships, internships or apprenticeships.

Must youth remain unemployed from the time of registration with YES until time of placement?

Youth need to be unemployed at the time of registration. This is a self-declaration by the youth.

What happens if youth find employment one day after registering with YES, but still want the option to be placed in a YES job?

At the time of registration, the youth needs to be unemployed.

If at verification when the 12-month work experience is still unfolding and the company cannot demonstrate absorption, what happens?

In the event that a measured entity has met the uptake target at the time of verification but has not met the absorption target due to the 12-month quality workplace experience still unfolding, the entity needs to provide verification evidence that indicates commitment to absorb youth once the YES employees complete the 12-month workplace experience and are absorbed. Once absorption takes place, the entity will provide the verification evidence to the agency within one month to show absorption has been met. Failure to do so may lead to the retracting of the B-BBEE certificate and report by that B-BBEE verification agency. The responsibility of ensuring that absorption is met, lies with the measured entity and the B-BBEE verification agency.

SoC(dti): Verifiable evidence would include, but is not limited to, samples of certified ID copies, samples of employee contracts that meet the definition of absorption and interviews.

What evidence is required to confirm that youth are unemployed?

This is a self-declaration by the youth. 

Is YES a verification agency?

No.

What evidence must a measured entity gather for verification?

The YES Practice Note provides a broad overview of the types of documentation that will be required at the time of B-BBEE verification (not limited to). Verification is however not static, the quality of evidence presented would determine whether or
not additional evidence is required. Please see the YES verification checklist or contact us to request it.

If a company is participating for the second year, must the previous year or new year’s headcount be used?

The measured entity must use the headcount as at the last financial year-end.

If, for operational reasons, a company’s headcount decreases in the year of participation in YES, how will this affect its target?

The measured entity’s headcount provided at the time that it registers to participate in the YES initiative, being the headcount as at the last financial year-end, is used to determine target for B-BBEE recognition. A change in the headcount during the period of participation in the YES initiative will not affect the target for B-BBEE recognition.

A change in the headcount during the period of participation in the YES initiative will not affect the target for B-BBEE recognition.

Can you participate in the YES programme if you have zero net value ownership?

Yes. This is possible based on the average sub-minimum being met by the measured entity.

Can youth participate in YES multiple times if they have completed one 12-month quality workplace experience?

No. The objective is to provide as many youth as possible with a full 12-month quality workplace experience.

What happens if a youth participates for less than eight months and wants to participate in the YES programme at another organisation?

This is possible as each youth should be afforded an equal opportunity for a full 12-month quality workplace experience. This means that the first company will not get recognition if the youth spent less than eight months with them.

A new 12-month quality workplace experience contract will be signed.

If a company was using a sworn affidavit and their status moves from an EME to a QSE or QSE to a generic - what level do they need to maintain or improve upon?

The measured entity needs to maintain its previous B-BBEE status level irrespective of measurement changes brought about by thresholds or sector codes. The practice notes provide for the dtic to approve for company participation if the BEE level changes due to e.g. jump from EME to generic.

If a company is non-compliant, can they participate?

The measured entity would need to at least achieve a level 8 before YES B-BBEE recognition is awarded.

Can youth be 35 at the time of participating?

Yes, provided that the YES-contract commences before his/her 35th birthday.

What happens if a company has a negative NPAT?

The target can still be calculated by utilising the industry norm calculation.

Can a company participate if they have been trading for less than a year?

Yes. 

Is there an acceptable margin/buffer for drop-offs on completion?

In the event that the participating YES Youth do not complete the programme, a 5% margin will be acceptable in order for the measured entity to receive YES B-BBEE recognition. 

It is important that the YES measured entity meets the calculated targets with consideration of the 5% allowance in order to receive B-BBEE recognition.

 If any YES Youth employees fall out of the YES initiative due to any circumstances and above the 5% margin and before completing 8 months of employment, the YES measured entity will have one (1) month to replace them in order to be eligible for B-BBEE recognition.

Can companies that fall under the scope of the Transport Sector Codes participate in YES?

Yes.

Can the salaries of the YES employees be claimed under skills development or relevant sector codes?

No. SoC (dti)

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