YES Initiative Practice Note 1

Oct 17, 2018 | B-BBEE Blog

The DTI published Practice Note 1 under Gazette 41975 on 12th October, to give clarity to and to implement the YES Initiative that was Gazetted on 28th August under Gazette 41866.

Highlights of the Practice Note are as follows:-

  • The Youth Employment Service Initiative is now implemented and in force for entities of all sizes.
  • The YES Initiative is extended to the Sector Codes.  This will exclude the Transport Sector since YES sits within Statement 000 of the Amended Codes of Good Practice and the various Transport Sector Codes are still based on the Old Codes.
  • All YES Entities will need to register with the YES Non-Profit Company via their website to achieve enhanced B-BBEE recognition. Registration fees for different service levels are provided on the website. The fees include the provision of a cell phone for each YES employee to provide reporting, e-learning and other services.
  • A YES entity must maintain or improve on its previous B-BBEE level to participate in YES. Where there are specific factors that make this impossible such as a downturn in business or a large supplier failing to maintain its B-BBEE level, entities may engage with the DTI B-BBEE Policy Unit with justifiable evidence for participation.
  • Absorption is as defined in the Amended Codes Of Good Practice and can only take place after 12 months of workplace experience or if it can be identified earlier during a B-BBEE verification exercise. However, due to differing Measured Periods, the Absorption Target will not apply during the first year of YES implementation.
  • The workplace experience being provided must be for 12 months and can be counted as long as 8 months is achieved. If any YES employee falls out, the entity has 1 month to replace the employee.
  • The workplace experience cannot be a Learnership, Internship or Apprenticeship so there is no double counting; the YES initiative is in addition to Skills Development learnership targets.  However YES entities are able to claim 50% of their Skills Development Spend for YES employees as informal training (Cat F and G) under the Skills Development element.
  • EME’s or 51% Black Owned QSEs who register as YES entities will have to be verified by a SANAS accredited Verification Agency under the relevant QSE scorecard if they wish to take advantage of the YES initiative. However, EMEs or QSEs can become host entities for youth employees taken on by other YES entities. This dynamic is an important factor in the roll out of this initiative.
  • Black youth being employed under YES must be unemployed at the time.
  • Eligibility based on Priority Element compliance is calculated as follows:-
    • Generic
      • Current sub-minimum targets or
      • An average of 50% across all three Priority Elements being 34 points or the 50% equivalent in the various Sector Codes.
    • QSE
      • Current sub-minimum targets i.e. Ownership plus 1 other or
      • 40% of Ownership and Skills Development being 13.20 points or the Sector Code equivalent or
      • 40% of Ownership and Enterprise and Supplier Development being 15.20 points or the Sector Code equivalent.
  • YES targets for Generic entities are the greater of:
    • 1.5% of the YES entity’s headcount at the end of the preceding year. i.e. the last day of the Measured Period.
    • 1.5% of the YES entity’s average NPAT in the immediately preceding three years  converted to headcount by dividing the average by R55,000. Where there is an average loss the NPAT provisions that apply to SED and ESD apply.
    • The target provided in Table 1 of Gazette 41866.
  • Public and Specialised Entities may participate with no sub-minimum requirements
  • Where an entity has no NPAT (NPO etc) or has not traded for three years, then the target is the higher of the 1.5% of headcount or the relevant Table.
  • YES targets for QSEs are based on Table 2 of Annexure B in Gazette 41866.
  • This Gazette lays down specific verification requirements for enhanced B-BBEE Recognition of YES entities.

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