10 Things to Know about Covid and Compliance in 2020

1. Despite Covid-19, there is no relaxation of the B-BBEE codes.

There is no exemption from implementation of and compliance to the B-BBEE Act during the lockdown period. Companies have to continue implementing.

2. Contributions to the Solidarity Fund cannot be claimed for BEE points.

The Solidarity Fund was established to respond to the current Covid-19 pandemic and not for BEE purposes. Contributions cannot be offset against SED or Skills Development spend.

3. Companies may have to adjust their annual B-BBEE targets and plans.

Companies affected by the lockdown have not been able to start training and other B-BBEE initiatives. B-BBEE targets and plans may have to be adjusted.

4. There is a four month tax holiday on payment of Skills Development Levies.

Whilst welcome relief for businesses, the 4 months tax holiday will reduce company budgets for skills development and necessitate adjustments for spending on training and bursaries.

5. 20% Mandatory Grant refunds will be reduced due to the tax holiday.

Quarterly mandatory grant refunds to companies are likely to be affected by the reduced tax income to the SETAs.

6. Less Discretionary Grant funding will be available from the SETAs.

Companies should expect less grant funding from the SETAs, as their budgets are reduced and priotrities shift due to Corona.

7. The 6% leviable amount for skills development will drop.

As companies reduce salaries, headcount and tax spend,the 6% leviable amount for spend on skills development will decrease. This means targets for spend on accredited training and bursaries will be lower than usual.

8. Learners can be contracted now and trained later.

As there is no relaxation on B-BBEE implementation, spend on training and bursaries must continue. Agreements can be entered during lockdown for training to be conducted online, or face to face training to commence post-lockdown.

9. Due to social distancing, online learning is playing an ever-increasing role.

Face to face training has stopped in most companies because of the need for social distancing. To keep training programmes going for B-BBEE purposes, companies are turning to online learning to meet their training targets.

10. To claim for absorption, proper recruitment is vital.

5% of not currently employed learnership graduates need to be offered permanent employment to quality for the 5 points for absorption. Online recruitment systems can help companies to recruit quality people without physically meeting each other.