Youth Employment Service Initiative – Gazette 41866

The DTI published the Youth Employment Service (YES) Initiative as Notice 502 in Gazette 41866 on 28^th August 2018. The YES Initiative enables any organisation, EME, QSE or Generic to enhance its BEE Level by 1 or 2 levels by providing jobs for young black people under the YES Initiative.

In summary:

• It amends Code 000 (General Principles and the Generic Scorecard) of the DTI Codes of Good Practice with immediate effect.
• To qualify for registration under the YES Initiative:
  • A Generic entity must meet the 40% sub-minimum requirements of the 3 Priority Elements or achieve an average of 50% across these Priority Elements.
  • A QSE entity must meet the 40% sub-minimum requirements of the 2 of 3 Priority Elements or achieve an average of 40% across these 2 Priority Elements.
  • The Measured Entity must ensure that it maintains or improves its BEE Level achieved in the previous year.
  • An EME does not have to meet any specific requirement.
• YES targets for Generic entities are the higher of:-
  • 1.5% of the entity’s headcount or
  • 1.5% of the entity’s average Net Profit After Tax (NPAT) over the last 3 years
  • The targets provided in a table based on revenue range from R50m = 6 youths to R500m = 15 youths.
• Targets for QSEs and EMEs are according to a table based on headcount ranging from 1-19 = 1 youth to 799 = 40 youths
• Eligible individuals to be hired under the YES Initiative are black people between the ages of 18 and 35.
• They must benefit from 12 months full time quality work experience and these jobs must be created in addition to existing headcount.
• Where the Measured Entity is unable to create sufficient new jobs, it may sponsor qualifying new jobs in EMEs or QSEs.
• The benefit of the YES provisions is that the BEE Level of the Measured Entity can be enhanced as follows:-
  • Achieve YES target + 2.5% absorption of the youth: 1 Level
  • Achieve 1.5 x YES target + 5% absorption of the youth: 1 Level + 3 bonus points
  • Achieve 2 x YES target + 5% absorption of the youth: 2 Levels
• It is important to note that this Gazette does not change the Priority Element compliance requirements that discount 1 BEE Level if the 40% sub-minimum requirement is not achieved. But an entity can now re-gain that BEE Level under the YES initiative and achieve a further Level by enhanced YES performance.
• 50% of Informal Skills Development expenditure for YES employees can be included under Category F and G in the Skills Development scorecard.

Therefore, the loss of 1 BEE Level by not meeting the black ownership requirements can be overcome through the use of the YES initiative.