Franchisors can benefit from a labour activation programme

FASA in partnership with INANI will be implementing a Labour Activation Programme that is funded by the Unemployment Insurance Fund that stands to benefit franchisors with tax incentives while assisting in skills development and job creation.

The Labour Activation Programme refers to deliberate interventions designed to integrate or re-integrate the unemployed into the labour market. The objective of LAP is to enhance employability, enable entrepreneurship and preserve jobs.

The envisaged program will be able to give over 1000 beneficiaries opportunities for training and employment. As part of the program participants will undergo a 12 month learnership program in various industries.

We appeal to FASA MEMBERS to be part of this project by providing and signing commitment letters for the hosting of learners for a 12-month period and to provide exit opportunities through permanent, fixed contracts and temporary jobs.

The benefits to employers for undertaking these programs are massive in that:

Employers will be able to claim a tax rebate for hosting the learnerships which is known as the 12H rebate. An amount of R60,000 rebate can be claimed per each candidate employed through a learnership. Section 12H of the Income Tax Act (the Act) provides for an allowance to employers in respect of qualifying ‘registered learnership agreement'(s) entered between the employer and employee. The allowance is intended as an incentive for employers to train employees. There are 2 levels of Tax Incentives (SARS):
1. R30,000 on commencement and completion allowances for learnerships and apprenticeships (R60 000 in total).
2. R50,000 commencement and completion allowances for learners with disabilities (R100 000 in total).
Tax Incentives are deductions on Employers’ taxable income that they can claim for each learnership candidate that they have in their employment, once at the start of the learnership, and once again at its completion. These incentives are legislated in section 12H of the Income Tax Act, 58 of 1962 and the amendments made in January 2010.
Employers can claim the monthly Employment Tax Initiative (ETI) for all candidates that they employed who are between the age of 18 and 29. Employment Tax Incentive (ETI) allows South African businesses to claim a PAYE tax rebate for employees between the ages of 18 and 29 who earn a gross salary of less than R6500 per month. The ETI aims to boost the employment of young job seekers.
An employee is eligible for the ETI if they:
1. work for the business helping with business operations, and they are paid for their services;
2. are recorded in employer’s records under the provisions of Section 31 of the BCEA;
3. are paid at least the minimum wage;
4. are employed in a special economic zone, or they are between the ages of 18 and 29, and; they possess a valid South African ID, a valid permit for asylum seekers, or an ID as defined by Section 30 of the Refugees Act.
Employers can improve their BBBEE scoring which includes numbers for differently able candidates.
B-BBEE: No business is forced to participate in B-BBEE. It is a voluntary process. One of the decisions that business owners in South Africa must make is whether to participate in the B-BBEE (Broad-Based Black Economic Empowerment) process. While an entity is not penalised for failing to embrace broad-based transformation or for having a low B-BBEE score, it is unlikely to be awarded contracts and licenses by the government and is less likely to be awarded contracts in the private sector. The following are some benefits that B-BBEE holds for the South African economy:
1. Skills Development – Learning and training provided in formal, non-formal and on-the-job settings.
2. Employment Equity – Hiring practices that encourage fair representation of members of minority groups, women and individuals who were likely to suffer discrimination.
3. Preferential Procurement – The procurement of goods and services from local, PDI (Previously Disadvantaged Individuals)-owned suppliers.
4. Enterprise Development – Investing time and capital in helping PDI establish, expand or improve their businesses.
Employers can increase their productivity through increased number of employees available.
Employers will be contributing to the reduction of unemployment in South Africa which in turn can improve the economy.
Employers will have a skilled pool of talent as a pipeline for further employment during brand expansions.
Candidates are paid a minimum of R3,000 and employers will be required to top up to the minimum wage.

There is a small window of opportunity to participate in this initiative that can benefit and give tax incentives whilst assisting in easing the country’s dire employment crisis. If you are interested in participating in this initiative click here to complete the application. APPLICATIONS CLOSE 30 JUNE