Both skills development and employment equity are imperative for businesses to comply with Broad-Based Black Economic Empowerment (B-BBEE or BEE) scorecard requirements.
Skills Development in South Africa has become a strategic priority for businesses that wish to attain or retain an acceptable BEE level and also meet the requirements of the Skills Development Act. The Skills Development Act provides businesses with a solid framework to implement learning strategies towards skills development that will improve the South African workforce’s skills. With the revised BEE scorecard, companies can earn maximum skills development points if they spend the required 3% or 6% of their annual payroll on skills development programmes such as SETA-accredited training initiatives (depending on the business category).
A prerequisite for recognising any points under Skills Development on your BEE scorecard is the submission of the following:
- Workplace Skills Plan (WSP);
- Pivotal Plan;
- Annual Training Report (ATR) prior to the deadline in April each year.
Businesses will only receive points on their BEE scorecard once they prove that a Workplace Skills Plan had been submitted. The new amended BEE Codes further require that the WSP and Pivotal Plan be approved by the SETA prior to earning any points on the BEE scorecard.
The Skills Development Levy (SDL) is payable by employers in different sectors of the economy and serves to fund learning and skills development programmes for socially and economically marginalised groups in South Africa. If your company promotes learning and development in the workplace, you will reap the rewards in the form of a better skilled and more productive workforce.
By paying your SDLs monthly, you qualify for –
- Skills development grants (mandatory and discretionary);
- Substantial tax allowances when you implement learnerships in your company;
- Businesses can qualify for a tax rebate of up to 50% of all employees below the age of 29 (youth subsidy) under certain circumstances;
- A further R80 000 as an additional tax expense to be recouped on all registered learnership programmes;
- An increase in your B-BBEE compliance level.
Businesses that are unaware of these incentives and claiming processes will forfeit valuable revenue.
We will advise businesses in this regard and provide a Skills Development Facilitator service that assists businesses in claiming back portions of the Skills Development Levies already paid to SARS.
Skills Development Levy Payable
Existing legislation requires all businesses with an annual payroll in excess of R500 000 (including director fees) to pay 1% of their payroll to SARS, which will then distribute the money to the appropriate SETA with which the business is registered.
Failure to pay this levy constitutes an offence.
Depending on the specific needs of your sector/industry and SETA-specific requirements, contributing employers may annually claim back between 20% - 69,5% of skills levies paid to SARS, provided that they:
- register a Skills Development Facilitator (SDF);
- submit a Workplace Skills Plan (WSP) indicating training for the next reporting period;
- submit a Pivotal Plan that gives account of all training provided to employees during the reporting period;
- offer SETA-accredited training such as Mandatory training and Learnerships etc.
The Employment Equity Act requires businesses that employ more than 50 people or exceed certain thresholds as set for the specific industry to submit Employment Equity Reports to the Department of Labour before October of each year (or January if submitted electronically).
Businesses that fail to comply could potentially–
- face fines of up to R2,7 million or 10% of annual turnover. The Employment Equity Act creates various criminal offences and stipulates that no points may be awarded under the Employment Equity element for BEE purposes if an Employment Equity Report was not submitted.
- be deemed not to be an Empowering Supplier and as such will be unable to accumulate any points on the procurement element of their clients.
Option 1: Standard Skills Development Facilitation (SDF) service
In order to create synergy between the Skills Development Act, the Employment Equity Act and the BEE Codes, this option includes the following services where SERR Synergy will, on behalf of the client–
- act as Skills Development Facilitator (SDF) for your business;
- ensure that your business is registered with the relevant SETA;
- draft and submit an annual Workplace Skills Plan (WSP) and Pivotal Plan to ensure eligibility for mandatory grants awarded by your SETA;
- complete and submit quarterly reports;
- claim annually from your industry-specific SETA;
- introduce accredited training for the business to be presented by accredited training providers;
- introduce skills development programmes such as learnerships, bursaries and youth subsidies;
- draft an Employment Equity Plan;
- submit annual Employment Equity reports.
- assist in establishing Training and/or Employment Equity Committees.
Please note that no training or labour services are included in the above standard SDF service option.
Option 2: Skills Development Facilitation and Mandatory Training combined
This SDF option includes all the SDF services as listed in our Standard SDF service option plus Accredited Mandatory Training in line with our Training Schedule as per the quotation document.
Please note that this option excludes Labour Pro services.
Option 3: Comprehensive Skills Development Facilitation, Mandatory Training and Labour Services
This option offers an all-inclusive SDF service where we have combined all our SDF services as listed in option 1 plus access to Accredited Mandatory Training in option 2 plus our Labour Pro service.
Labour Pro is an integrated labour and industrial relations service for businesses. By including this option, we will guide and assist businesses in proactive and supportive ways with regard to the required processes and procedures to ensure compliance with labour legislation and to mitigate the risks to which businesses are exposed in relation to employment issues.
Legislation covered by Labour Pro consulting service:
- Basic Conditions of Employment Act (BCEA);
- Labour Relations Act (LRA);
- Unemployment Insurance Fund (UIF);
- Workmen’s Compensation legislation / Compensation for Occupational Injuries and Diseases Act (COIDA);
- National Minimum Wage Act (NMWA).
For more information, please speak to one of our consultants.