Linking legislation for true transformation

Linking legislation for true transformation

To create a diverse, skilled and powerful workforce NEXTEC integrates the B-BBEE, Skills Development and Employment Equity Acts.  It is about more than compliance, it is about true transformation.

In South Africa, companies must comply with transformation laws. Those who embrace the process, find it easier to engrain these principles into their company culture. They experience a positive impact on productivity, employee satisfaction and profitability.

There are three Acts to promote transformation:

  1. B-BBEE Act No. 53 of 2003
  2. Skills Development Act No. 97 of 1998
  3. Employment Equity Act No 55 of 1998

Poor implementation may stunt a company’s growth and effectiveness. It is costly to comply (particularly to B-BBEE requirements).  NEXTEC’s holistic approach reduces costs and helps companies to transform, upskill and comply.

Linking B-BBEE to Employment Equity

To help companies adhere to Employment Equity (EE) plans and B-BBEE policies, we:

  • Submit annual EEA2 and EEA4 reports to the Department of Labour. Failure to submit during the window, results in zero points for management control during an upcoming B-BBEE Audit. Both reports drive true transformation in the workforce.
  • Improve on B-BBEE scoring for management control through recruitment policies that align to EE goals and targets
  • Implement succession planning. This enhances compliance to both acts.
  • Set disability targets for EE planning – gaining up to two points on the B-BBEE Scorecard for employees with disabilities.

Linking Skills Development and Employment Equity

Companies reduce employee costs and offset training costs when we:

  • Promote youth employment of new employees. Companies benefit from the Employee Tax Incentive (ETI) and subsequent tax deduction using Section 10(i)S of the Income Tax Act.
  • Engage in talent and acquisition programs using learnerships, apprenticeships and These areas offer sizable tax deductions via the 12(H) Tax Incentive for Learnerships.  The goal is to build a skilled labour force.
  • Do succession planning for identified employees. This helps meet EE targets. Companies also reduce training costs by using succession plans as the backbone for Workplace Skills Plans and Annual Training submissions.
  • Appoint a Training Committee and an EE Committee, often formed by the same group of selected employees.

 Linking B-BBEE to Skills Development

The Skills Development requirement to spend 1% of leviable payroll on training, is often one of the costliest aspects of transformation.  Companies with a salary cost in excess of R500 000 per annum must register with the relevant industry SETA.  They must then pay 1% of payroll to the tax authority via their monthly Skills Development Levy (SDL) payments.

Companies can claim back a portion of this contribution in the form of Mandatory, Pivotal and Discretionary Grants.  To receive portions back, companies need to know the conditions that apply.

To further transformation, companies should:

  • Employ key candidates that fit Employment Equity and B-BBEE requirements
  • Identify key roles and people for succession planning with their training needs
  • Integrate the plan with compliance and funding strategies.

Transformation should happen while meeting business needs. With NEXTEC’s B-BBEE consulting services, we help you do this.

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