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Updated BBBEE Codes as of 1 May 2015

Some of the major changes that have been implemented are:

  1. The turnover thresholds have been adjusted upward as follows:
  • Exempt Micro Enterprise (EME): < R10 million annual total revenue;
  • Qualifying Small Enterprise (QSE): R10 – R50 million annual total revenue; and
  • Generic Enterprise (GE): > R50 million annual total revenue.
  1. The introduction of Priority Elements means that certain elements now have minimum compliance requirements failing which your organisation will be discounted a level on the scorecard. These priority elements are as follows:
  • Ownership – you will need to score at least 40% of the Net Value points available i.e. there are 8 points available and you would need to score at least 3.2 points to avoid discounting. This means you will need to have a minimum of 10% black shareholding within your organisation.
  • Skills Development – you will need to score at least 40% of the total points available for this element. Generic enterprises must score at least 8 points (40% of 20 points) and Qualifying Small Enterprises must score at least 10 points (40% of 25 points).
  • Enterprise and Supplier Development (previously Preferential Procurement + Enterprise Development) - you will need to meet at least 40% of each of the compliance targets to avoid discounting. 

NOTEA Generic Enterprise will need to comply with all 3 priority elements and a Qualifying Small Enterprise has to comply with Ownership and one of the other priority elements only. 

  1. The introduction of the Empowering Supplier Concept. By definition an Empowering Supplier is a B-BBEE compliant entity, that is a good citizen South African entity, compliant with all regulatory requirements of the country (i.e. taxation, labour, employment equity, skills development etc) and should meet at least three, if it is a large enterprise, or one, if it is a QSE, of the following criteria:
  • Local Content – At least 25% of cost of sales excluding labour cost and depreciation must be procured from local producers or local suppliers in SA, for service industry labour costs are included but capped at 15%.
  • Job creation – 50% of jobs created are for black people provided that the number of black employees since the immediate prior verified B-BBEE Measurement is maintained.
  • At least 25% transformation of raw material/beneficiation which includes local manufacturing, production and/or assembly, and/or packaging.
  • Skills transfer – spend at least 12 days per annum of productivity time deployed in assisting black EME and QSE beneficiaries to increase their operation or financial capacity.

NOTEAll EME’s automatically qualify as an Empowering Suppliers.

  1. Qualifying Small Enterprises have to comply with all the elements of the scorecard, including 2 priority elements.
  1. The target for Skills Development has doubled to 6% of payroll for Generic Enterprises & 3% for Qualifying Small Enterprises and now includes training of all black people (and not only your employees). The submission and approval of your SETA reports is compulsory, for both Generic and Qualifying Small Enterprises, in order to score points under this element where your payroll exceeds R500 000 per annum.
  1. Your management control (and employment equity), as well as skills development targets will be based on sub-race group targets as presented by the Dept of Labour Commission on Employment Equity.