Wage subsidy targets youth unemployment

4 November 2013

The Employment Tax Incentive Bill, which was passed by Parliament last week, aims to reverse the high levels of youth unemployment in South Africa by using tax incentives to encourage employers to take on young trainees.

The draft law proposes a youth wage subsidy aimed at paving the way for on-the-job training and the development of soft skills through work experience for people aged from 18 to 29 years.

The subsidy is one of many programmes forming part of the government’s youth employment strategy, including the National Youth Accord.

“The implementation of the Bill will expose the youth to obtain workplace skills that will position them for better job opportunities,” Phumla Williams, acting CEO of the Government Communication and Information System (GCIS), said on Monday.

Williams said thorough consultation processes had been followed in drafting the law, and the government was confident that the concerns raised had been responded to.

“The Bill makes clear provisions to correct potential abuse by employers and has no impact on current labour relations or legislation, and will by no means weaken the rights of the workers.”

The government would ensure that the implementation of the Bill would not lead to a potential hiring bias towards younger people, where older employees could easily be replaced, Williams said, adding that South Africa’s labour laws catered for the protection of employees regardless of age.

The government, in particular the National Treasury and SA Revenue Service, would closely monitor and evaluate the Bill’s implementation to ensure that there was no abuse of the incentive, she said.

The final leg to the implementation of the Bill will be its sign-off into law by President Jacob Zuma.

Source: SAnews.gov.za