In terms of the Broad-based Black Economic Empowerment (B-BBEE) Amended Construction Sector Code, specific thresholds determine whether an entity is classified as an Exempted Micro Enterprise (EME) for Built Environment Professionals (BEPs) and Contractors. These thresholds are:
| Type | Turnover | Black Ownership | Level |
| BEP | Below R6 Million | Below 30% | 5 |
| BEP | Below R6 Million | 30% – 50% | 4 |
| BEP | Below R6 Million | 51% or more | 2 |
| BEP | Below R6 Million | 100% | 1 |
| Contractor | Below R10 Million | Below 30% | 5 |
| Contractor | Below R10 Million | 30% | 4 |
| Contractor | Below R10 Million | 51% or more | 2 |
| Contractor | Below R10 Million | 100% | 1 |
In terms of the new B-BBEE Amended Construction Sector Code, any EME that qualifies for an automatic level 1, 2, 4 or 5 certificate is required to comply with 40% of the Qualifying Small Enterprise (QSE) Skills Development Expenditure target as a compulsory priority element to avoid discounting. This requirement is, however, not applicable if an EME has a turnover of less than:
- 1.8 million for Built Environment Professionals (BEPs)
- R3 million for Contractors
These entities do not have to comply with the Skills Development sub-minimum requirement as above. They will be issued with an affidavit, however, we recommend EME clients to rather obtain an EME certificate and try to and enhance their level due to extreme competitiveness in the construction sector.
This concession granted to them will fall away if the EME elects to enhance its B-BBEE level in one of the following ways:
- Obtain measurement in terms of QSE Scorecard as a whole and apply the B-BBEE status level so determined.
- Obtain measurement in terms of Skills Development expenditure as per QSE scorecard and only if full points are achieved the B-BBEE level will be enhanced with 1 level.
- Obtain measurement in terms of Supplier Development expenditure category as per QSE scorecard and only if full points are achieved will the B-BBEE level be enhanced with 1 level.
Should an EME use both the Skills- and Supplier Development elements, they will be able to gain 2 levels’ enhancement but only if full points are achieved on both these elements.
Any EME with a turnover more than the turnovers stated above must comply with the 40% sub-minimum requirement on a QSE scorecard to avoid being discounted.
ABOUT THE AUTHOR
Geralene van Wyk obtained her BA (Psychology) and LLB degrees from the North-West University. After her studies she completed her articles in Pretoria and was admitted as a practicing attorney in 2006 and a conveyancer in 2007. She joined SEESA BEE in 2011 as a legal advisor and is currently a SEESA BEE National Training Senior Legal Advisor at the Pretoria Head Office.