Page
Skills Development and Skills Development Levy Act
Completion requirements
View
What is Skills Development?
The Skills Development Act aims to develop strategies and improve the skills of the workforce by providing learnerships, financing skills development and regulating employment services. It is vital to have a skills development strategy, as only 14 million people of 54 million in South Africa are economically active.
Purpose of the Act
The following are some of the purposes of this legislation:
- To develop the skills of the South African workforce (improving quality of life, productivity and competitiveness, promoting self-employment and improving the delivery of social services);
- To increase levels of investment in education and training;
- To encourage employers to use the workplace as an active learning environment; to provide opportunities to acquire new skills and new entrants to the labour market with experience;
- To encourage participation in learnership and training programmes;
- To improve the employment prospects of previously disadvantaged persons.
The following institutions are established in terms of the Act:
- National Skills Authority
- National Skills Fund
- Skills Development levy-grant scheme
- SETAs
- Labour Centres
- Skills Development Planning Unit
National Skills Authority
It is the body that advises the Minister of Labour on the national skills development policy and strategy, establishes guidelines for implementation and allocates subsidies from the National Skills Fund. It also liaises with the SETAs on the policy and strategy. It also conducts investigations on matters falling under the Act.
Sectoral Education and Training Authorities (SETAs)
There are 21 SETAs that have been established for all the sectors in South Africa. (for example, banking; local government; health and welfare; construction and wholesale/retail).
Seta functions are as follows:
- Develop sector skills plan;
- Implement the plans by establishing learnerships; improving workplace skills plans; allocating grants and monitoring education and training in the sector;
- Promote learnerships (identify workplaces for practical work experiences; support the development of learning materials and assist in learnership agreements);
- Apply for accreditation;
- Liaise with the NSA; and
- Report to the Director-General of Labour.
Learnerships - Disputes Referred to the CCMA
SETAs establish learnerships (a contract of employment), which lead to a qualification registered by the South African Qualifications Authority, which is also registered with the Director-General. Learnerships create a bridge between learning and working. It
establishes occupational competence, which is able to respond to the labour market demands. There are learnerships for workers (persons already employed by the company) and unemployed persons (they are employed on a learnership for a fixed period of time).
Any dispute pertaining to learnerships (interpretation/application of the agreement; contract; a determination in terms of s18(3) of the Skills Development Act; termination of the agreement or contract of employment). Disputes are referred to the CCMA like other referrals. The dispute must be arbitrated if not settled at conciliation.
Skills Programmes
It is occupationally based, gives credits towards a qualification, makes use of accredited training providers and complies with prescribed requirements. All programmes support lifelong learning.
Click here to view an explanation of the Skills Development and Skills Development Levy Act.
Klik hier om na 'n verduideliking van die Wet op Vaardigheidsopleiding en vaardigheidsontwikkelingsheffing te luister.
Skills Development Levy (SDL)
The Skills Development Act was introduced in 1998. This Act gave rise to the Skills Development Levies Act in 1999. Both Acts' were instituted to develop the skills - through training and education - of the South African workforce. This is achieved by employers paying a 1% levy of their total wage bill, payable to SARS, for the training and development of people within South Africa.
Who pays Skills Development Levies (SDL)?
The Skills Development Levies Act applies to all employers except:
- Public sector
- Religious or charity organizations
- Public entities that get more than 80% of their money from Parliament
- Employers:
- Whose total payroll is less than R 500 000 from 1 August 2005
- Who do not have to register according to the Income Tax Act
Do I Need to pay Skills Development Levies?
Where does the money go? SARS collects all SDL's and retains 8% as a collection fee. 12% goes to the National Skills Fund and 80% to the SETA's. SETA's retain 10% for their own administration, disperse 50% back to compliant and participating employers (Mandatory Grant) and allocate 20% to their discretionary pool of funds. Non-compliant or non-participating employers' Mandatory Grant is swept into the discretionary pool. SETA's may also apply for additional funding from the National Skills Fund for special projects. Should the SETA not use the funds at their disposal they are swept back to the National Skills Fund (NSF).
What Is The Value Of My Organization's Mandatory Grant?
What is discretionary funding? Companies that don't participate forfeit their Mandatory Grant each year. Their unclaimed money, plus the SETA's discretionary allocation and any special funding they receive from the National Skills Fund, provides funding to participating employers in excess of what is available as their Mandatory Grant (half of their 1% Skills Development Levy). This funding is applied for, and allocated by the employer's SETA, at their sole discretion.
The funding can take the following forms:
- Bursaries (Full qualification)
- Can be for currently employed (18.1) or unemployed learners/employees (18.2)
- Funding covers training cost
- In the case of unemployed learners, it provides a learner allowance and an employer incentive
- Skills programmes (short course)
- Internships (Worksite experience for unemployed learners)
- Funding covers training cost
- It provides a learner allowance and an employer incentive
- Funding ranges from R 1 600 to in excess of R 50 000 per person
What are the benefits of participating?
- Participants may access funding from respective SETA's
- Employers can benefit from financial incentives (Section 12H)
- Organizations optimize B-BBEE compliance by aligning training objectives
- Businesses address skills shortages through participation
What happens if I don't pay Skills Development Levies Qualifying employers who do not pay Skills Development Levies will be issued with a fine equal to 10% of their levy amount and interest.
Click on the links below to open the resources.