Article written by Katleho Mini (Legal Advisor at SEESA – Pretoria Head Office)
The financial year-end and deadlines for submissions of Employment Equity (EE) and the Workplace Skills Plan (WSP) is near, and companies need to comply with legislation before the closing dates for each of the requirements. The purpose of this article is to outline the relevant deadlines and advise on the principles, benefits and repercussions for non-compliance.
The Financial Year-End
Companies that need a B-BBEE certificate have five elements to attend to under the Codes of Good Practice. Companies that fall under a specific industry, the draft Sector Codes or the amended Sector Codes are tailored under the same elements with the targets being the differentiating factor. The five BEE scorecard elements are as follows:
• Management and Control (Including Employment Equity);
• Skills Development;
• Enterprise and Supplier Development; and
• Socio-Economic Development.
All B-BBEE verifications conducted in South Africa are subject to the South African National Accreditation System (SANAS) regulatory body. One of the requirements from SANAS is that entities must meet targets within the financial year. All Enterprise Development, SocioEconomic Development and Supplier Development donations have to be made strictly within each company’s financial period as no donations made outside of the applicable financial period will be accepted. For example, if a company is to be rated on the February 2021 financial year, all donations need to be made during 01 March 2020 until 28 February 2021. No donations made from 01 March 2021 and onward will be accepted for the February 2021 rating. The same principle applies toward Skills Development as all Skills Development expenditure also has to be spent within the financial year as discussed above. This can be a daunting task mainly if a professional’s services are not sourced timeously. Estimated figures are used to budget for contributions to reach targets for each element, as mentioned above.
The Workplace Skills Plan
A Workplace Skills Plan is a document that details all the company’s skills needs and describes the range of skills development interventions that the organisation will use to address these needs. A WSP enables the employer to identify and arrange for the improvement of training to address the skills gaps within an organisation. It is imperative to
note that without a WSP, no points for skills development can be awarded irrespective of the amount spent or whether scarce and critical skills have been transferred.
The Importance And Benefit Of Submitting The WSP In Time
• Points will be awarded under the B-BBEE scorecard under the Skills Development element which is also a priority element;
• Recover mandatory grants up to 20% from the relevant SETA; and
• Recover discretionary grants from the relevant SETA if you do pivotal programmes considered critical or scarce.
Lastly, all WSP’s are to be submitted by or before 30 April annually to the relevant SETA.
The Employment Equity Report
All designated employers are required by law to submit an Employment Equity Report and be in possession of an Employment Equity Plan. A designated employer is an entity that Employs 50 or more employees or Employs fewer than 50 employees but has a total annual turnover that is greater or equal to the specific industry limit.
According to Section 21 of the Employment Equity Amendment Bill Act 47 of 2013, all designated employers must submit their employment equity reports annually on the 1st working day of October (for manual submissions) or the prescribed date (for electronic submissions), 15th January annually.
Suppose an entity fails to submit a report by the last day as stipulated above, fines will be imposed on the relevant entity for failure to submit a report, failure to provide written notice in the event that the entity was unable to submit a report or if the reasons for not submitting are false or invalid. If a designated employer is not in possession of an Employment Equity Report, no points can be claimed for BEE purposes under the Management and Control element.
Conclusion: The most crucial time frame is the financial year-end. Companies whose financial year-end is February 2021 and will be rated on a scorecard based on the February 2021 financial statements, need to make all donations urgently and prior to 28 February 2021. Companies whose financial year end is March, June, August or December have more time to plan and ensure that a portion of the income is put in place monthly for the necessary donations under each element.
Also of equal importance, WSP’s and EE reports must be submitted in time, without submitted and approved WSP and EE regardless of spend you will not be able to claim BBBEE points. Contact your nearest SEESA office to assist your business with its Workplace Skills Plan and Employment Equity Report.
Contact your nearest SEESA office to assist your business with its Workplace Skills Plan and Employment Equity Report.
About The Author:
Katleho Mini obtained his LLB degree from the University of South Africa in 2015. He completed his clerkship articles with the main focus on Commercial Law and broadened his horizons after being admitted as an attorney to take on other legal disciplines. He is currently employed as a Legal Advisor at SEESA, Pretoria Head Office and has held this position since August 2018.
BEE Commission – https://www.bbbeecommission.co.za/ B-BBEE Amendment Number Act 46 of 2013 Skills Development Act Number 97 of 1998 Skills Development Levies Act Number 9 of 1999 National Skills Development Plan (NDP) Employment Equity Act Number 55 of 1998