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Understanding YES (Youth Employment Scheme) initiatives

Understanding YES (Youth Employment Scheme) initiatives

 

On the 27th 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 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.

 

In understanding the YES Programme, one begins to understand a priority which has always been intended but never been expressed, to create entry-level opportunities for unskilled and unemployed people under the age of 30 to enter the workplace. The youth sector is our country’s most promising sector which is currently in crisis with 67.4% (2017) unemployment in the under 25 age bracket.

 

If you consider that over 500 000 young people are completing school every year and becoming unemployed unless workplace entering opportunities are being created, added to that another 500 000 school dropouts, then you begin to appreciate the scale of the problem being addressed by these changes.

 

This amendment now makes the purpose and intention towards these unskilled and unemployed young people clear and unambiguous. Companies are being encouraged to embrace these people and are being offered healthy rewards in return.

 

Participating in the YES Programme is not compulsory but is highly rewarding.

 

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, a corporate business may use the creation of a micro-enterprises channel by focusing on empowering young people to start their own business enterprises.

 

A YES Employee is a Fixed-Term Contract Employee – 12 months at the same level and total-cost-to-company as a permanent Employee in the same job (any existing job) at any level (identical Basic Conditions of Employment), with NO EXPECTATION OF GAINFUL EMPLOYMENT at the end of the 12-month period.

 

There are only two criteria which apply to YES Candidates.

  1. The first is that they have to be between the ages of 18 and 35
  2. The second is that they have to be “Black” as defined by the B-BBEE Act 53 of 2003, amended in 2013

 

It is all about growth in the number of Employees from the 2017/18 headcount, where the highest number resulting from the application of three formulas will be applied to companies with a turnover in excess of R50 Million a year, and only one table which will apply to companies making less than R50 million turnover a year.

 

How will the Employment Tax Incentive and the Youth Empowerment Service (YES) work together?

 

These two programmes, the one (ETI) created by and falling under SARS, and the other (YES) by the Department of Trade and Industry, are designed to work together and to complement one another.

 

The target group for the YES and the ETI programmes are identical, namely “Previously unemployed Black people between the ages of 18 and 35”.

 

The distinguishing feature is that YES targets are over-and-above the Employment Threshold of the year proceeding with the introduction of the YES programme. This means that whereas in the 2017/18 year the company had 100 employees on its payroll, in pursuit of YES it would have to add to its target, e.g. 8 additional 12-month employees to the original Headcount of 100 and therefore satisfying the YES requirement of showing that that headcount for the year under review, has grown to 108.

 

What the ETI does is allow the Employer to create the YES Jobs, in pursuit of becoming a YES-Certified Employer, by incorporating the ETI advantage. This means using the R1000 a month PAYE diversion, which ETI allows, to offset the costs of creating the new YES position in your company.

 

Therefore, if the total-cost-of-employment for a new YES job is R5000 a month, the actual cost incurred by the Employer would be R5000 less the R1000 ETI deduction/PAYE-offset, or R4000 a month, for 12 months.

 

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 a 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/get-involved/