Employment equity in South Africa is set to undergo significant changes by the end of 2024. The recent amendments to the Employment Equity Act 55 of 1998 (the “EEA”) brings in a new era of compliance and inclusivity. These changes have substantial implications for businesses across various sectors, necessitating a proactive approach to ensure compliance.
Removal of Annual Turnover/Income Threshold
One of the most important changes is the removal of the annual turnover/income threshold requirement to qualify as a “designated employer”. Previously, businesses had to meet specific turnover criteria to fall under this category. With the amendments, the definition of a designated employer is now solely based on workforce size or collective agreements:
- Workforce Size: Any employer with 50 or more employees is classified as a designated employer.
- Collective Agreements: Employers bound by a collective agreement that designates them as such, regardless of their annual turnover.
This change simplifies the classification process but expands the scope of the act, bringing more employers into the fold of mandatory compliance.
Another critical amendment is the empowerment of the Minister of Employment and Labour to:
The Minister can now define specific economic sectors that will be subject to tailored employment equity targets and set numerical targets for demographic representation, aiming to ensure a more equitable workforce distribution.
Draft regulations with proposed sector targets were made available for public comment in 2023, and final regulations are expected to be published soon. These targets will likely vary across sectors, reflecting the unique demographic and economic landscapes of each.
Be prepared to ensure Employment Equity Compliance!
For employers, particularly those now designated under the new amendments, there are several critical steps to ensure compliance with the updated EEA:
- Conduct a thorough analysis of your current workforce demographics. Identify areas where your company falls short of the expected targets.
- Create a strategic plan to address gaps in employment equity. This plan should include recruitment, retention, and development strategies aimed at enhancing diversity and representation within your workforce.
- Educate your management and HR teams about the new requirements. Ensure that they understand the importance of compliance and the steps necessary to achieve it.
- Establish a robust monitoring system to track progress against the set targets. Regular reporting and audits will be crucial to demonstrate compliance and make necessary adjustments.
As we move towards the end of 2024, staying ahead of these developments will not only ensure legal compliance but also foster a diverse and inclusive corporate culture that can drive innovation and growth.
