Skills development is one of the easiest priority elements to comply with, although it requires a business to spend a monetary amount that will contribute to the development of the competencies of black people in and out of the business.
This element in South Africa has become a strategic priority for businesses that wish to attain or retain an acceptable BEE level and meet the Skills Development Act requirements. By just following the scorecard, one already knows what is expected of you.
What is meant by a priority element?
There are three priority elements in BEE, namely Ownership, Skills Development, and revised Enterprise and supplier development. This means that a company must obtain a score of at least 40% in these elements to ensure that the BEE score obtained by a company is not penalised by one level. For example, if you earn enough points to be a level 4 but do not get the 40% score on the skills element, then you will only receive a level 5. Depending on the turnover of your entity, if you are generic, you will need to comply with all three elements. If you are a QSE, only 2 of 3, of which one must be ownership.
What are the Prerequisites for Skills Development?
- An approved Workplace Skills Plan (WSP) which target the development of Priority Skills must be in place and submitted each year;
- Pivotal Plan where the company will identify, after receiving a monetary target for skills development, how many learnerships, apprenticeships and internships he will register in his business during the financial period he wishes to be rated in. In short, anything that will result in a person receiving an NQF qualification;
- Annual Training Report (ATR), which contains the projection of training spend, which will be submitted prior to the deadline and could possibly result in a monetary grant after application prior to the deadline in April each year;
- Registration of SDL and payment of SDL (payroll above R500 000 per annum). Existing legislation requires all businesses with an annual payroll over 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 to.
It is important for a business to know and to comply with these prerequisites before making monetary spending’s on the skills element and understand what type of entity you are, QSE or Generic, in order to get the correct advice on the scorecard applicable to you so that you can make cost-effective spending’s on the skills element.
Contact your SEESA BEE Legal Advisor to assist your business with any B-BBEE related queries you might have. Alternatively, SMS the word “SEESA” to 45776 for an expert legal advisor to contact you.
About the Author:
Dominique van Deventer is a SEESA BEE and Labour Legal Advisor at the SEESA Bloemfontein branch and has been with SEESA for 6 years. He obtained his LLB degree from the University of the Free State.
- BBBEE Codes of Good Practice of 2013
- Skills Development Act of 1998