Empowering Corporates for Efficient Foreign Employment
In a recent development that could significantly impact the corporate landscape in South Africa, the Trusted Employer Scheme was officially announced in regulations published on October 11, 2023. This scheme introduces a streamlined process for employers who meet specific criteria, making it easier and faster to employ foreign workers.
In this article, we’ll discuss the details of the scheme, its eligibility criteria, the potential benefits it offers to corporations, and possible pain points.
Understanding the Trusted Employer Scheme
The Trusted Employer Scheme is an initiative aimed at simplifying the process of hiring foreign workers for South African corporations. Under this scheme, eligible employers can enjoy expedited processing and reduced complexities in employing foreign talent. This initiative is driven by the Department of Home Affairs and the Office of the Presidency, signalling a significant push toward a more efficient foreign labour market.
Key Application Deadlines
There is a limited window for application. The application period extends until November 20, 2023. Missing this deadline means potentially missing out on the benefits offered by the Trusted Employer Scheme.
To be considered for the Trusted Employer status, corporations must meet a set of criteria, and achieving a minimum score of 80 out of 100 points is required.
There are five main criteria, but two stand out as non-negotiable:
1. Significant Investment in the South African Economy and Pledge: Corporations must have invested a minimum of 100 million Rand in capital expenditures in South Africa since 2018. It’s very important that this happened after 2018, as anything before will not count toward your points. Investment in operational expenses does not count toward this criterion.
Committing to pledges of 100 million Rand or more at the South African Investment Conferences can also make a corporation eligible for the Trusted Employer status. Higher pledges can earn more points, with 200 million Rand or more receiving the maximum points available.
2. Number of Employees: You must have at least 100 employees, there is no waiver to change this number – this must be met. These cannot be outsourced labourers or through a labour broker. If you have 150 or more, maximum points in this category are achieved.
In addition to the two primary criteria mentioned above, the Trusted Employer Scheme considers three other criteria:
3. Sector Classification: Depending on the sector your business operates in; you can earn points. Renewable energy and energy infrastructure earn 15 points, while manufacturing, services, and resource-based sectors receive 10 points.
4. Skills Transfer: Implementing programs such as bursary schemes and greater development programs can earn a corporation 20 points.
5. Employment Equity or Equity Equivalents: Corporations with high B-BBEE (Broad-Based Black Economic Empowerment) scores can gain points, and foreign investors with equity equivalents approved by the Department of Trade and Industry are also eligible for points.
Group of Companies Consideration
For corporations with subsidiaries or affiliated companies, the Trusted Employer Scheme assesses the brand rather than individual subsidiaries. This approach simplifies the evaluation process.
The application process involves submitting specific documents, all of which are clearly outlined in the government Gazette published on October 11, 2023. One aspect worth noting is the confirmation of the sector in which your business operates. This confirmation is provided by the Department of Trade and Industry, and it is recommended to contact them for quick sector classification.
Advantages of Trusted Employer Status
The primary advantage of being a Trusted Employer is the potential for reduced criteria for foreign workers. While the exact criteria for foreign employees are yet to be fully disclosed, the Department of Home Affairs has indicated that they will be lower than those for other work permits. This means that hiring foreign talent will be more accessible and streamlined for Trusted Employers.
The Trusted Employer Scheme in South Africa holds the promise of making the foreign labour market more accessible and efficient for corporations that meet its criteria. With clear eligibility criteria and a transparent evaluation process, this initiative aims to facilitate the hiring of foreign talent, ultimately benefitting both corporations and the South African economy.
It’s great to see an initiative like this from the Department of Home Affairs, but we do remain sceptical on a few possible pain points and will not celebrate early as some of our colleagues have. We do not yet know how many companies will be granted this status, and how effective the initiative will be.
Even if visas and processing of employees are fast-tracked by the DHA, this does not mean that all the internal issues of processing speed the DHA has faced will be suddenly fixed – the same issues may remain. Corporate accounts registered through the TES may be more reliable and faster, but the DHA is not known for their perfect project implementation!
If you have any questions or require assistance with the application process, do not hesitate to reach out. The deadline for applications is November 20, 2023, and by the end of this year, you could know if you qualify as a Trusted Employer.
Written by Andreas Krensel, Managing Director
Written by Simon Carletti, PR and Creative Supervisor