July 18, 2024

In South Africa, in the wake of apartheid there was a divide in opportunities. To rectify this and create equal opportunities Broad-Based Black Economic Empowerment was implemented in 2003. This response to the inequality of the past has empowered previously disadvantaged individuals to grow and contribute to the economy in a number of ways.

B-BBEE in Practice

B-BBEE is strictly enforced in all South African businesses and organisations with the goal of transforming South Africa. This transformation is based in increasing the number of black individuals that manage, own and control the South African economy in an effort to restore equality.

The process can be very technical and somewhat complicated so many businesses enlist the help of labour compliance professionals to assist in ensuring their compliance.

B-BBEE Elements

There are currently five actively implemented elements used to measure B-BBEE compliance:

  • Ownership
  • Management
  • Skills Development
  • Enterprise and Supplier Development
  • Socio-Economic Development

The Benefits of being B-BBEE Compliant

The private sector has more incentive to buy from compliant businesses as it can further their own B-BBEE status by contributing towards enterprise and supplier development. You can only do business with the government and public sectors if you are B-BBEE compliant. This applies if you want to apply for a tender, buy state-owned assets, or build a public-private partnership.

The Benefits of Skills Development for businesses

Skills development has become a strategic priority for businesses to meet an accepted level of B-BBEE compliance and to fulfil the requirements of the Skills Development Act. To earn the maximum points from skills development companies need to spend 3-6 per cent of their annual payroll on SETA-accredited training initiatives – depending on their business category.

Businesses are required to pay a skills development levy of 1 per cent of their payroll if they have a payroll exceeding R5000 00 annually. Failing to pay this levy is an offence.

Paying your skills development levy will make you eligible for a tax rebate if you appointa registered Skills Development Facilitator, submit your Workplace Skills Plan, submit your Pivotal Plan and/or offer SETA-accredited training.

If you require assistance with any B-BBEE compliance there are qualified professionals to help you do so.