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10 Things to Know

Impact of Covid-19 on 2020 BBBEE Compliance

Impact of Covid-19 on 2020 BBBEE Compliance

Fariba Bowen

How will the Covid-19 pandemic influence annual compliance targets? Will SETA grants still be available? How will the skills levy payment holiday affect your plans and targets? Will there be any relief in terms of compliance? These questions were the topic of focus at our recent Community of Experts, held for the first time as an online event last Tuesday, 26 May. Digitalising the workshop enabled us to enjoy attendance and participation of over 120 HR practitioners from around the country.

Andrew Bizzell, Managing Director of The BEE Chamber – a 14,000 member strong consultancy – gave an indepth presentation on the ‘new’ BEE landscape, with a particular emphasis on how Covid-19 impacts on BEE compliance.

https://youtu.be/cxqWIN6KFyA

Anusha Mariemuthu, CEO of AM2PM Consulting, has had the advantage of many years experience working for an international corporation, leading its transformation efforts. Over the last few years, she has provided insights to corporate clients on best practice in terms of compliance and transformation. In her presentation, she explored the practical implications of Covid-19 and how practitioners must respond.

https://youtu.be/nkHqLSkVKaA

Stefan Lauber has been the CEO of iFundi for the last 20 year and works with a large number of blue-chip companies around skills development. He unpacked the need for a successful transition towards digitalisation in the HR and skills development space and showcased the online learning, recruitment and project management solutions that iFundi has worked on for the last few years.

https://youtu.be/KtnTWV_jQWI
10 Things to Know about Covid and Compliance in 2020

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.

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