South Africa: Trusted Employer Scheme Announced

During the annual?South Africa Investment Conference?(SAIC) on April 13, 2023, President Cyril Ramaphosa unveiled plans for an overhaul of the work visa system. The goal of this initiative is to attract the skills required to boost investment and achieve the president’s objective of attracting R2-trillion in new investments over the next five years. Among the measures proposed is the introduction of a Trusted Employer Scheme, which will allow qualifying companies to provide flexible pathways for skilled applicants and their employers to obtain work visas quickly and efficiently, in line with global best practices.

What Is the Trusted Employer Scheme?

Although South Africa’s?work visa?policies provide a solid foundation for facilitating the entry of skilled workers into the country, this review has identified that the unpredictability of visa adjudications limits the effectiveness of these policies. Other countries have faced similar challenges and have implemented policies that enhance predictability for applicants and businesses while managing the various immigration risks.

The Trusted Employer Scheme would help South Africa attract skilled workers and manage immigration, particularly in cases where high volumes of applications need to be processed. To qualify for this program, an employer or business must demonstrate its financial capacity to employ a foreign national, its commitment to training programs for South African citizens, and its status as a responsible corporate citizen. Additionally, businesses or corporate employers who participate in the program can benefit from priority processing of their visa applications thanks to reduced requirements and supporting documents.

Purpose Of the Trusted Employer Scheme

The primary objective of the Trusted Employer Scheme (TES) is to recognise and reward trustworthy users of the program by offering fewer document requirements and faster processing times for visa applications. For corporate employers, the most significant incentive is the ability to quickly process visa applications and mobilise foreign employees, enabling them to begin generating revenue from their services sooner.

Under this system, compliance obligations are primarily placed on the employer, rather than the government, with corresponding sanctions for non-compliance.

To be included in the TES, employers must undergo verification to demonstrate that they are legitimate businesses capable of adhering to the law. Conversely, if an employer is found to have violated the rules (e.g., through an audit or Immigration Inspectorate), they may be barred from bringing foreign nationals into South Africa for three years. In addition, the directors of the company may be personally fined, or the company may be permanently removed from the Trusted Employer Scheme.

Qualifying Criteria

If you’re interested in becoming part of the Trusted Employer Scheme, there are several criteria you’ll need to meet, with points allocated for each one. The first requirement is to make an investment, either by investing in South Africa or pledging. In the government’s communication regarding TES, they note R500-million as an example of the defined threshold of investment. This will earn you 20 points. This pledge is to be made at the Annual South African Investment Conference (SAIC).

Next, you’ll need to employ South Africans. To qualify, you must have at least 500 employees, 60% of whom must be South African. This will earn you 25 points. Additionally, the sector in which your company is registered will be taken into consideration. The?Department of Trade Industry and Competition?(DTIC) considers certain sectors to be of national priority or strategic importance, such as the energy sector. If your company falls within one of these sectors, you’ll receive an additional 15 points.

You’ll also need to demonstrate skills transfer and show how your company adheres to skills transfer requirements. Here you must show proof of an existing Skills Transfer Program or Graduate Development Programme. This will earn you 10 points.

Enterprise Size

Enterprise size is another factor that will be considered, based on the number of employees and the annual turnover. The minimum annual turnover is sector-specific, but for?Critical Skills, it’s set at a minimum of R35-million. The minimum number of local employees is 500. See below for a full table:

All these points will be added up to give you a total score of 100, but to qualify for the Trusted Employer Scheme, you’ll need a minimum of 80 points.

An internal intergovernmental panel will review your application, and you’ll receive a decision within 60 days. If you’re approved, you’ll be recognised as a trusted corporate employer. However, if your application is denied, there’s no appeal process. The decision is final, and you won’t be able to participate in the scheme.

How to Apply

Once the Trusted Employer Scheme is launched, all corporations will have a 30-day window to apply from the date of the launch. However, only 100 corporations will be accepted initially, and the scheme will be reviewed over a period of 100 days to ensure that everything is in order. After this initial period, more corporations will be able to register. It’s important to note that corporations will need to register themselves, rather than relying on third-party providers to do so.

The specific launch date has not been finalised but will fall in May. The 30-day application window opens once the TES is gazetted.

Documents Required

When submitting an application letter for consideration for TES), it’s important to provide specific information. The letter should be concise, totalling no more than 10 pages, and should include the following:

1. A brief introduction of the company and the economic sector in which it operates.
2. Information on any pledges made to the South African Investment Conference (SAIC).
3. Details on Employment: This should include proof that the company has over 500 employees, with at least 60% of the total staff complement being South African citizens or permanent residents employed in various positions.
4. Information on investment or business operations in a sector identified by the Department of Trade Industry and Competition (DTIC) as being of national priority or strategic importance. Being a member of a recognised Chamber of Commerce could be advantageous.
5. Details on a Skills Transfer Programme or Graduate Development Programme for South African citizens or permanent residents. This could include permanent employees within the company.
6. Information on the size of the enterprise, including the total number of full-time equivalent paid employees and the total annual revenue. The minimum requirement is 50 employees employed locally and a minimum of R35-million annual turnover, which is relevant to the sector.

In addition to submitting an application, corporations will need to provide certain company documents, such as registration proof with the?Companies and Intellectual Property Commission?(CIPC), your Tax Compliance Status, and evidence of registration with the?Compensation Fund for Occupational Injuries and Diseases, and the?Unemployment Insurance Fund?(UIF). They’ll also need to provide Employment Equity (EE) reports to demonstrate their commitment to this requirement.

Benefits of the Trusted Employer Scheme

The Trusted Employer Scheme offers several benefits for qualifying employers. One of the most significant advantages is that all visa applications for TES employers will be processed through the Premium Visa Application Centres and One Stop Shop Premium Lounges. This will save time and reduce the hassle associated with the visa application process.

In addition, TES employers will enjoy reduced visa requirements as per the concessions. This especially reduces the administrative burden on the employer.

To further streamline the process, each TES employer will have a dedicated Key Account Manager at the?Department of Home Affairs.

Moreover, the scheme ensures that work visa outcomes will be obtained within 10-40 working days, enhancing efficiency, and reducing processing times.

Conclusion

The South African Trusted Employer Scheme is an important program that would provide employers with several benefits, including improved immigration processes, faster processing time, reduced costs, and improved compliance.

The program is designed to make?South Africa?an attractive destination for foreign investment and talent, and to ensure that employers are able to quickly and efficiently fill critical positions with qualified foreign employees. By meeting the eligibility criteria and complying with the obligations of trusted employers in South Africa, companies can enjoy the benefits of the program and contribute to the growth and development of the South African economy.

Encouraging participation in the scheme can lead to increased investment and job creation, benefiting both employers and South Africa.

We are cautiously optimistic that the introduction of this system will be done efficiently and swiftly. If successfully implemented, the TES is a great step in the right direction for South African immigration services, and will provide much-needed relief to employers and companies in South Africa.