B-BBEE Scorecard (South Africa)

What is the B-BBEE scorecard?

The B-BBEE scorecard measures a company’s contribution to broad-based black economic empowerment under South Africa’s Broad-Based Black Economic Empowerment Act 53 of 2003 and the Codes of Good Practice issued under it. The score gives the company a B-BBEE status level, from Level 1 down to Level 8 or non-compliant, which customers count in their own procurement scores and which affects access to public sector work.

How the scorecard works

Under the Generic Codes, as amended on 31 May 2019, a large enterprise is measured on five elements: ownership, management control, skills development, enterprise and supplier development, and socio-economic development. Its total points set its level: 100 points or more for Level 1, which carries 135% procurement recognition, down to 40 points for Level 8, with 10%. Below 40 points, a company is a non-compliant contributor.

Size decides which rules apply. A business with annual revenue of R10 million or less is an exempted micro-enterprise and is deemed Level 4, or Level 2 or Level 1 if it is at least 51% or 100% black-owned. Between R10 million and R50 million it is a qualifying small enterprise with its own scorecard, and from R50 million it is a large enterprise. Some industries have their own sector codes.

The skills development element

For a large enterprise, skills development is worth 20 points, plus 5 bonus points. Most targets are a share of the leviable amount, the payroll on which the Skills Development Levy is calculated:

• 3.5% spent on learning programmes for black people, including training for unemployed black people (6 points);
• 2.5% on bursaries for black students at higher education institutions (4 points);
• 0.3% on learning programmes for black employees with disabilities (4 points);
• black people in learnerships, apprenticeships and internships equal to 5% of total employees (6 points);
• bonus points for absorbing those learners into employment when their programme ends (5 points).

To score at all, the company needs a Workplace Skills Plan, an Annual Training Report and a PIVOTAL report approved by its SETA, the sector education and training authority.

The 40% sub-minimum

Skills development is one of three priority elements, with ownership and enterprise and supplier development. A large enterprise must reach at least 40% of the 20 skills development points, which is 8 points. If it falls short, its status level is discounted by one level, for example from Level 4 to Level 5, although the points it did earn still count.

B-BBEE when you hire through an EOR

When you hire through TopSource as your Employer of Record in South Africa, your employees are on the payroll of the South African legal employer, so their training spend and headcount count towards that employer’s scorecard rather than one of yours. If you later set up your own South African company to sell to large local businesses or the public sector, it will be measured in its own right, and hiring through an EOR first gives you time to plan for that.

Frequently asked questions

How many points is skills development worth on the B-BBEE scorecard?

For a large enterprise under the amended Generic Codes, 20 points, plus 5 bonus points for absorbing learners into employment. Qualifying small enterprises use their own scorecard.

What happens if a company misses the skills development sub-minimum?

If it scores less than 40% of the 20 points, its B-BBEE status level is discounted by one level.

Does a foreign company need a B-BBEE certificate to hire in South Africa?

No. B-BBEE is not a condition for employing staff. It matters when a company wants to sell to South African businesses or the public sector, which take suppliers’ B-BBEE levels into account.

Related terms in South Africa

• Temporary Employment Services (South Africa)
• Section 198B Fixed-Term Rule (South Africa)
• BCEA Earnings Threshold (South Africa)
• Retrenchment (South Africa)
• Restraint of Trade (South Africa)
• Family Responsibility Leave (South Africa)
• Sick Leave Cycle (South Africa)
• Employment Equity Act Reporting (South Africa)
• Critical Skills Work Visa (South Africa)
• POPIA and Employee Data (South Africa)
• EMP201 Monthly Return (South Africa)

Sources

• B-BBEE Commission: amended Codes of Good Practice, Gazette 42496 (31 May 2019)
• Broad-Based Black Economic Empowerment Act 53 of 2003