
Taking the sting out of compliancy.
BEE Consulted takes the sting out of all compliance requirements against legislation for both Black Economic Empowerment and Employment Equity.
We offer consulting and advisory to SMME, Corporate clients and Multinationals in South Africa on the effective implementation and understanding of the Revised Codes of Good Practice for B-BBEE.
Strategic implementation of B-BBEE using the Amended Codes is vital to achieve a verification rating.The impact of the Amended
Codes will be substantial to any business and achieving a Level 4 Generic or QSE rating could be impossible if you don’t begin to implement B-BBEE strategically within your organisation.
The good news is that BEE Consulted has a solution that is both practical and very achievable.
Are you confused about what needs to be done and how Black Economic Empowerment works?
We can help!
We provide strategic solutions which allow our clients to achieve the highest possible BEE score. Developing a true understanding of our clients allowing us an understanding of the vital questions to achieve true transformation, this includes determining the following:
We have historically focused our services around Broad-Based Black Economic Empowerment in South Africa. Since 2008 our focus has extended to include solutions that meet the challenges of carrying out successful and value-adding corporate strategy, empowerment, transformation, and sustainability programmes.
Our solutions include:
Our objective is to help our clients integrate social responsibility and socio-economic empowerment into their strategic vision, with an objective of encouraging sustainable business growth and social development.
The Employment Equity act, No 55 of 1998 was established to address unfair discrimination and to ensure equity within the workplace.
The aim of the Act is to:
According to the Act, organisations that are deemed a “designated employer” where your revenue exceeds the prescribed threshold on turnover or if you employ more than 50 employees must draft and submit Employment Equity reports to the Department of Labour by 1st of October annually.
We are able to provide organisations with Employment Equity consulting services which includes:
Should you have an audit by the Department of Labour and do not comply with the amendments to the Equity Act, you could face a fine of up to 10% of company Revenue/Turnover.
We facilitate the development of employees in the organization and evaluate the skills development needs of the organisation and continually assist in the implementation of identified needs.
In terms of the Skills Development Levies Act all organisations in South Africa with a payroll exceeding R500,000 per annum must pay a 1% Skills Development Tax on their payroll. In terms of the act, you may claim back up to 55% of this Skills Development Tax if:
BEE Consulted’s Skills Development Facilitation services include, but are not limited to:
Why not check out the rest of our services?
BEE (Black Economic Empowerment) is a programme launched by the South African government to redress the inequalities caused by apartheid laws by giving previously disadvantaged groups (Black Africans, Coloureds, Indians and some Chinese) of South African citizenship economic opportunities previously not available to them. It includes measures such as Employment Equity, Skills Development, Ownership, Management and Control, Socio-Economic Development and Preferential Procurement.
Black Economic Empowerment (BEE) - or Broad-Based Black Economic Empowerment (B-BBEE) as it is technically known - is not affirmative action, although employment equity forms part of it. Furthermore it does not aim to take wealth from white people and give it to black people. It is essentially a growth strategy targeting the South African economy's weakest point: inequality.
"No economy can grow by excluding any part of its people, and an economy that is not growing cannot integrate all of its citizens in a meaningful way." DTI (Department of Trade and Industry)
"As such, this strategy stresses a process that is associated with growth, development and enterprise development, and not merely the redistribution of existing wealth."
Black Economic Empowerment is thus an important policy instrument aimed at broadening the economic base of the country - and through this, stimulating further economic growth and creating employment.
This strategy is broad-based and this reflects in the name of the legislation: the Broad-Based Black Economic Empowerment Act of 2003.
This reflects the government's approach, which is to "situate Black Economic Empowerment within the context of a broader national empowerment strategy... focused on historically disadvantaged people, and particularly black people, women, youth, the disabled, and rural communities".
As the DTI notes, discrimination "is at its most severe when race coincides with gender and/or disability".
Fronting means a deliberate circumvention or attempted circumvention of the Act and the Codes. Fronting commonly involves reliance on data or claims of compliance based on misrepresentations of facts, whether made by the party claiming compliance or by any other person. Verification agencies, and /or procurement officers and relevant decision-makers may come across fronting indicators through their interactions with measured entities.
Cases in which black people are appointed or introduced to an enterprise on the basis of tokenism and may be discouraged or inhibited from substantially participating in the core activities of an enterprise; and
Discouraged or inhibited from substantially participating in the stated areas and/or levels of their participation;
Initiatives implemented where the economic benefits received as a result of the B-BBEE Status of an enterprise do not flow to black people in the ratio as specified in the relevant legal documentation.
Enterprises that have concluded agreements with other enterprises with a view to leveraging the opportunistic intermediary's favourable B-BBEE status in circumstances where the agreement involves:
Significant limitations or restrictions upon the identity of the opportunistic intermediary's suppliers, service providers, clients or customers;
The maintenance of their business operations in a context reasonably considered improbable having regard to resources; and
Terms and conditions that are not negotiated at arms-length on a fair and reasonable basis.
Exempted Micro Enterprises (EME's) are businesses that are exempt from measurement in terms of the DTI's codes of Good Practice for BEE where their turnover is under R10 million per annum. They automatically qualify as 100% contributors towards BEE, this offers small South African businesses the opportunity to grow as a result of BEE irrespective of the make-up of the shareholding.
EME's allows entities purchasing from them to claim at least 100% of those purchases as B-BBEE Spend. EME's are required to prove to their clients that they do qualify, this commonly takes place through the presentation of an Affidavit. EME's with a black shareholding of less than 51% automatically qualify for a Level 4 rating which is a 100% contributors towards B-BBEE, whilst EME's with a black shareholding of more than 51% qualify for a Level 2 rating and automatically qualify as 110% contributors towards B-BBEE. EME's with a black shareholding of 100% qualify for a Level 1 rating and automatically qualify as 135% contributors towards B-BBEE.
A Qualifying Small Enterprise (QSE) is one of the categories of South African businesses as per the Broad-Based Black Economic Empowerment Act. A Qualifying Small Enterprise is a business with a turnover of R10 million but less than R50 million and is measured using the QSE Scorecard.
A QSE company should comply with 2 out of the 3 priority elements where Ownership is mandatory and one may choose between either Skills Development or Enterprise & Supplier Development. QSE’s should score 40% of the Net Value points for Ownership, 40% of the total number of points for Skills Development or 40% of the three sub-sections of the Enterprise & Supplier Development element to avoid being discounted by 1 level on their scorecard.
A Generic Enterprise is one of the categories of South African businesses as per the Broad-Based Black Economic Empowerment Act. A Generic Enterprise is a business with a turnover of more than R50 million and is measured using the Generic Scorecard.
Each element has different weighting points. The measured entity must be rated on all 5 elements of the B-BBEE scorecard, regardless of whether they can or cannot score under a specific element.
A Generic company should comply with all 3 priority elements namely Ownership, Skills Development and Enterprise & Supplier Development. A Generic company should score 40% of the Net Value points for Ownership, 40% of the total number of points for Skills Development and 40% of the three sub-sections of the Enterprise & Supplier Development element to avoid being discounted by 1 level on their scorecard.
The turnover thresholds for the Revised Codes of Good Practice are as follows:
• EME (Exempted Micro Enterprises) below a turnover of R10 million
• QSE (Qualifying Small Enterprises) from R10 million up to R50 million
• Large Enterprises (previously known as Generics) over R50 million
| Element | Code Series | Weighting |
|---|---|---|
| Ownership | 100 | 25 points |
| Management Control | 200 | 19 points |
| Skills Development | 300 | 20 points |
| Enterprise & Supplier Development | 400 | 40 points |
| Socio-Economic Development | 500 | 5 points |
| TOTAL | 109 points |
| B-BBEE Status | New Qualification |
|---|---|
| Level 1 Contributor | >100 points on the Generic Scorecard |
| Level 2 Contributor | >95 but <100 points on the Generic Scorecard |
| Level 3 Contributor | >90 but <95 points on the Generic Scorecard |
| Level 4 Contributor | >80 but <90 points on the Generic Scorecard |
| Level 5 Contributor | >75 but <80 points on the Generic Scorecard |
| Level 6 Contributor | >70 but <75 points on the Generic Scorecard |
| Level 7 Contributor | >55 but <70 points on the Generic Scorecard |
| Level 8 Contributor | >40 but <55 points on the Generic Scorecard |
| Non-Compliant | < 40 on the Generic Scorecard |
| Ownership Indicator | Weighting points | Compliance target |
|---|---|---|
| 2.1 Voting rights | ||
| 2.1.1 Exercisable voting rights in the Enterprise in the hands of black people | 4 | 25% + 1 vote |
| 2.1.2 Exercisable voting rights in the Enterprise in the hands of black women | 2 | 10% |
| 2.2 Economic Interest | ||
| 2.2.1 Economic Interest of black people in the Enterprise | 4 | 25% |
| 2.2.2 Economic Interest of black women in the Enterprise | 2 | 10% |
| 2.2.3 Economic Interest of the following black natural people in the Enterprise: | 3 | 3% |
| ●Black designated groups; | ||
| ●Black participants in Employee Ownerships Schemes; | ||
| ●Black beneficiaries of Broad-Based Ownership Schemes; or | ||
| ●Black participants in Co-operatives | ||
| 2.4 New Entrants | 2 | 2% |
| 2.5 Net value | 8 | 10 year targetson Formula A |
| TOTAL | 25 |
| Measurement Category & Criteria | Weighting points | Compliance target |
|---|---|---|
| 2.1 Board Participation | ||
| 2.1.1 Exercisable voting rights of blackboard members as a percentage of all board members | 2 | 50% |
| 2.1.2 Exercisable voting rights of blackfemale board members as a percentage of all board members | 1 | 25% |
| 2.1.3 Black Executive directors as a percentage of all executive directors | 2 | 50% |
| 2.1.4 Black female Executive directors as a percentage of all executive directors | 1 | 25% |
| 2.2 Other Executive Management | ||
| 2.2.1 Black Executive Management as a percentage of all executive directors | 2 | 60% |
| 2.2.2 Black female Executive Management as a percentage of all executive directors | 1 | 30% |
| 2.3 Senior Management | ||
| 2.3.1 Black employees in Senior Management as a percentage of all senior management | 2 | 60% |
| 2.3.2 Black female employees in Senior Management as a percentage of all senior management | 1 | 30% |
| 2.4 Middle Management | ||
| 2.4.1 Black employees in Middle Management as a percentage of all Middle management | 2 | 75% |
| 2.4.2 Black female employees in Middle Management as a percentage of all Middle management | 1 | 38% |
| 2.5 Junior Management | ||
| 2.5.1 Black employees in Junior Management as a percentage of all Junior management | 1 | 88% |
| 2.5.2 Black female employees in Junior Management as a percentage of all Junior management | 1 | 44% |
| 2.6 Employees with disabilities | ||
| 2.6.1 Black employees with disabilities as a percentage of all employees | 2 | 2% |
| TOTAL | 19 |
| Measurement Category & Criteria | Weighting points | Compliance target |
|---|---|---|
| 2.1.1 Skills Development expenditure on any programme specified in the Learning Programme Matrix for black people as a percentage of the Leviable amount | ||
| 2.1.1.1 Skills Development expenditure on Learning programmes specified in the Learning Programme matrix for black people as a percentage of the Leviable amount | 8 | 6% |
| 2.1.1.2 Skills Development expenditure on Learning programmes specified in the Learning Programme matrix for black disabled employees as a percentage of the Leviable amount | 4 | 0.3% |
| 2.1.2 Learnerships, Apprenticeships and Internships | ||
| 2.1.2.1 Number of black people participating in Learnships, Apprenticeships and internships as a percentage of total employees. | 4 | 2.5% |
| 2.1.2.2 Number of black unemployed people participating in specified in the Learning Programme matrix as a percentage of number of employees. | 4 | 2.5% |
| 2.1.3 Bonus points | ||
| 2.1.3.1 Number of black people absorbed by the Measured and Industry Entity at the end of the Learnship programme | 5 | 100% |
| TOTAL | 20 (5) bonus |
| Measurement Category & Criteria | Weighting points | Compliance target |
|---|---|---|
| 2.1. Preferential Procurement | ||
| 2.1.1 B-BBEE procurement spend from all Empowering Suppliers based on the B-BBEE Procurement recognition levels as a percentage of Total Measured Procurement spend | 5 | 80% |
| 2.1.2 B-BBEE procurement spend from all Empowering Suppliers that are QSE's based on the applicable B-BBEE Procurement recognition levels as a percentage of Total Measured Procurement spend | 3 | 15% |
| 2.1.3 B-BBEE procurement spend from all Empowering Suppliers that are EME's based on the applicable B-BBEE Procurement recognition levels as a percentage of Total Measured Procurement spend | 4 | 15% |
| 2.1.4 B-BBEE procurement spend from all Empowering Suppliers that are at least 51% black owned based on the applicable B-BBEE Procurement recognition levels as a percentage of Total Measured Procurement spend | 9 | 40% |
| 2.1.5 B-BBEE procurement spend from all Empowering Suppliers that are at least 30% black women owned based on the applicable B-BBEE Procurement recognition Levels as a percentage of Total Measured Procurement spend | 4 | 12% |
| Bonus points | ||
| B-BBEE Procurement spend from Designated Group suppliers that are atleave 51% black owned | 2 | 2% |
| 2.2 Supplier Development | ||
| 2.2.1 Annual value of all Supplier Development contributions made by the Measured Entity as a percentage of the Target | 10 | 2% of NPAT |
| 2.3 Enterprise Development | ||
| 2.3.1 Annual value of Enterprise Development contributions and Sector Specific Programmes made by the Measured Entity as a percentage of the target | 5 | 1% of NPAT |
| 2.4 Bonus points | ||
| 2.4.1 Bonus point for graduation of one of more Enterprise Development beneficiaries to graduate to the Supplier Development level | 1 | |
| 2.4.2 Bonus point for creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives by the Measured Entity | 1 | |
| TOTAL | 40 (4 bonus) |
| Measurement Category & Criteria | Weighting points | Compliance target |
|---|---|---|
| Annual value of all Socio-Economic Development Contributions by the Measured Entity as a percentage of the target | 5 | 1% of NPAT |
Checkout our services
For a professional consultation and competitive quotation contact Charlene Skipp on (083) 780 7209 or email us on info@beeconsulted.co.za
We look forward to working with you to obtaining your B-BBEE rating and becoming compliant in terms of Employment Equity.
Sustainable B-BBEE made easy!