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Employment Equity Amendment Act Introduces Modifications to Workplace

South Africa’s recently enacted Employment Equity Amendment Act introduces modifications to workplace transformation regulations and requires careful attention to detail when designated employers develop a business plan to meet compliance requirements. The amended Employment Equity Act introduces a new approach to goals and targets which were previously identified and executed by each designated employer according to their business capabilities. This is the key issue that has been highlighted by the Department of Employment and Labour, as the prime reason for slow transformation in the country. To address this, the Act empowers the Minister of Employment and Labour to identify and implement targets which designated employers will be given a finite amount of time to meet. The goal is this fundamental change is to speed up the pace of transformation and hold employers accountable for meeting the targets, failing which they could face severe fines. Delinquent employers who have failed to submit their annual reports on time are already familiar with the swift action placed upon them for failure to comply.

While smaller companies of less than 50 employees with an annual turnover that exceeded the amounts stipulated on the Schedule 4 document, previously had to submit annual reports in the same manner as designated employers, now benefit from the scrapping of the Schedule 4 requirement, larger companies will need to meet more stringent compliance requirements. The amended act mandates designated employers to develop employment equity plans in line with the targets which will be set by the minister meaning that all current Employment Equity Plans will be null and void. It will be imperative for employers to synchronise their EE plans to meet the employment targets for black individuals outlined in the broad-based black economic empowerment (B-BBEE) Codes of Good Practice alongside their Employment Equity plans. The B-BBEE Act focuses on a more specific employee demographic than the EE Act, but both share the aligned goals of promoting greater workplace equity and diversity.

The incorporation of Department stipulated economic sectors and geographical regions means that the sectoral targets will differ for all businesses depending on their location and industry. The targets will need to be met by designated employers and failure to do so will require strictly regimented documentation proving the reasons as to why compliance has not been met. While the Department has provided a list of reasons that will be accepted as valid, employers are urged not to hide behind these reasons. Designated employers will be required to actively reach the targets required of them and take actions to support the meeting of these targets, such as reaching outside of regional restrictions, providing training to previously designated employees to enable them to meet the operational requirements of positions which will elevate them, thereby enabling employees to meet the prescribed sectoral targets.

Enterprises aiming to engage in government contracts are required to secure a certificate from the Department of Employment and Labour, verifying their compliance with the Act and its aims, along with their adherence to the requirements of the National Minimum Wage. The Department of Employment and Labour will be increasing the number of Employment Equity Labour inspectors enabling the Department to enforce adherence with the EEA Act’s goals.