Employers can earn points on their Broad-Based Black Economic Empowerment (BBBEE) scorecard by employing people with disabilities, which translates into financial benefits and tax allowances.
Employing people with disabilities could assist companies in achieving their ideal BBBEE status! Companies are equired to have people with disabilities constitute 7,5 percent of the workforce with six percent of the payroll
spent on skills development.
Employers earn four points by spending at least 2,5 percent of the skills budget on the unemployed. At least 0,3 percent of the six percent skills budget should be allocated to skills development for people with disabilities. By employing unemployed people with disabilities, companies can achieve both targets at once.
Another easy way for companies to earn more BBBEE points is through learnerships. Learnerships for unemployed learners with disabilities can be used as a recruitment tool. Attributing one percent of a company’s net profit after tax on socio-economic development results in up to five points on the BBBEE scorecard.
For example, to be compliant, an employer with a payroll of R10 million and 1 000 employees should employ at least 75 people with disabilities and be developing the skills of 40 of these employees. This hypothetical company needs to spend R600 000 on skills development, with R30 000 allocated to employees with disabilities.
Of the skills development budget, R250 000 should be spent on unemployed persons. If it costs R60 000 to place an unemployed learner with a disability in a learnership programme, the company would only have to place ten learners in the programme to comply with the skills development target. These learners would be factored into their disability employment equity and skills development compliance targets. If the company partners with a disability organisation to recruit learners, it further contributes to their socio-economic development spend.
Companies can also apply to their relevant Skills Education Training Authorities (SETAs) for discretionary grant funding, so the cost of the ten learners is fully funded. If the ten learners are Employee Tax Compliant (ETI), the company will realise a benefits of up to R120 000 and would be entitled to a tax allowance of R120 000 per learner.
At the marginal tax rate, this realises a cash benefits to the employer of R336 000. The financial benefit to the employer could be in the region of the R1200 000 on the ETI and R336 000 on their tax allowance totaling R456 000.
The learners would count towards their compliance targets. The total BBBEE points would be two points achieving disability employment equity, four points for disability skills spend, eight points for skills spend, four points for unemployed learner spend and five points for socio-economic spend – totalling a potential 23 points.
In this scenario disability is truly proving to be a good business case.