Explaining the Y.E.S. Initiative

On the 27^th of March 2018, the President of the Republic of South Africa launched the Youth Employment Services (YES) Initiative, a business-led collaboration with government and labour, which aims to create more than one million paid internships for black youth. Its intention is to stimulate demand-side job creation through company investment and by leveraging government’s existing recognitions such as the Employment Tax Incentive and B-BBEE recognition for broad-based transformation.

YES’s three delivery channels are corporate work experiences, SMME “Host placements”, and creating Micro-enterprises. Corporate businesses are encouraged to create new one-year positions for unemployed youth over and above current employment numbers. Corporate businesses, which are unable to house new positions within their own structures, are encouraged to sponsor the salary for a one-year starter position at a black-owned SMME. Otherwise, corporate business may use the creation of a micro-enterprises channel by focusing on empowering young people to start their own business enterprises.

Only individuals between the ages of 18 and 35, who are “Black People” as defined in the B-BBEE Act 53 of 2003 as amended by Act 46 of 2013, are eligible employees. Entities which choose to participate in the YES Initiative, by engaging eligible employees in new positions, are required to sign fixed term or temporary employment contracts with all eligible employees filling new positions within their entity. These new positions must have a 12-month fulltime work experience paid for by the Entity. The minimum paid stipend is R3 500 per month. YES entities must commit to ensuring that a quality work experience is provided to the eligible employee insofar as the entity is able to provide it. Clear communication must be provided to the employee should the contract not be renewed or extended into permanent placement.

In order to be eligible for registration, Generic Entities with total revenue above R50 Million per annum must achieve at least the 40% sub-minimum under the priority elements (ownership, skills development and Enterprise and supplier development). Alternatively, Generic Entities must achieve an average of 50% across the three priority elements. QSEs must achieve at least 40% in two of the three elements, with ownership being one of the two elements. Alternatively, QSEs must achieve an average score of 40% across two priority elements, with ownership being one of the two elements. EMEs have no sub-minimum eligibility requirements.

Entities must ensure that they maintain or improve their B-BBEE status level and performance against the targets under the overall scorecard obtained in the prior year before participating again in the YES Initiative.

Targets for Generic Entities will be the higher between the three targets as set out below:

• 1.5 % of the entity’s headcount in the preceding year; or
• 1.5% of the entity’s average Net Profit After Tax (NPAT) from South African operations in the immediately preceding three years, converted to a headcount number by dividing that NPAT number by R55,000; or
• A target as determined by a comparison of the Total Revenue Band against the Minimum Black youth jobs as per the table below:

For QSEs and EMEs, the target per annum is based on headcount numbers as determined by the table below. These new jobs must be created in addition to existing headcount. Entities may not replace existing positions with new positions.

There is a proposal in the Draft General Principles Statement in respect of enhanced B-BBEE recognition for the achievement of targets in respect of the YES Initiative. If a company achieves a YES target and 2.5% absorption, it will move 1 B-BBEE Recognition Level up on the scorecard. Achieving 1.5 times YES target and 5% absorption Moves a company up 1 BBBEE Recognition up on the Scorecard and earns it three bonus points to the overall scorecard. Finally, if a company achieves double the YES target and a 5% absorption, then it moves 2 B-BBEE recognition levels up on the scorecard.

Companies wishing to register as YES members will incur registration fees and a recurring annual sign-up fee of:

• R20 000 per company with a turnover above R200 million per annum;
• R15 000 per company with a turnover between R100 and R199 million per annum;
• R10 000 per company with a turnover of between R50 and R99 million per annum;
• R2 500 per SMME with a turnover of between R10 million to R50 million per annum;
• Free registration for SMMEs with turnover of under R10 million;
• Qualifying companies with a turnover of over R50 million per annum will commit a percentage of NPAT towards YES target for B-BBEE recognition.

Companies wishing to get involved in the YES Initiative can do so on the YES’s website: https://www.yes4youth.co.za/for-business/ 

Ntombikayise Moloro

Legal Assistant, Johannesburg

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