On 12 April 2023, the Employment Equity Act (2020) was signed into law. As such, the Amended employment equity laws go to further regulate diversity and transformation in South Africa. This amendment places variations on the original Employment Equity Act 55 of 1998, which came into being as a means to promote diversity and equality in the workplace. the Amended Employment Equity law introduces several substantial changes that require employer attention. These revisions, not yet in application, come into effect on 1 September 2023, represent a vital revision to the transformation of the South African employment landscape and employment practices which will deepen the impact of employment equity across the country.
Some significant changes in the EEA Act include the introduction of sector and sub-sector targets for industrial sectors per geographic region which requires employers in their relevant sectors to meet specific transformation goals. Bearing in mind that this now only applies to companies employing more than 50 people. Where previously employers with less than 50 people, who’s annual turnover exceeded a specific figure, detailed in Schedule 4 of the Employment Equity Act, employers with less than 50 people are, as of September, relieved of their compliance responsibilities.
The introduction of the sector and sub-sector targets is a departure from the previous methodology which permitted employers to set their own company targets, within their employment equity plans. Due to failure of this approach to render the desired transformation goals of the Department, the revamp was deemed necessary for the purpose of achieving more rapid transformational outcomes.
The sectoral targets will be published in the Government Gazette by the Minister of Employment and Labour after consultation with the affected sectors, the process of which is currently underway. The Department of Employment and Labour predicts that the amendments will become effective as of 1st of September 2023 but this still needs to be confirmed closer to the time, as consultation permits.
Main Provisions to be aware of include the thatthe Minister will set employment equity targets for economic sectors and regions, also regional targets, as racial diversity in South Africa often presents regional differences.
Designated employees must submit employment equity plans for their companies, specifying how they will achieve these goals and submitting annual reports to the Department of Labour and Employment within the next 5 years, to obtain their annual certificate of compliance.
To obtain the certificate, designated and non-designated employers engaging in business with the government must meet specific criteria, including compliance with sectoral numerical targets, submit the annual employment equity report, address unfair discrimination and in the previous 12 months have no outstanding awards by the CCMA for non-payment of the national minimum wage.
All other designated employers are mandated to draft, implement and monitor a five-year employment equity plan, indicating their progress towards achieving targets by year five. (Targets must be aligned with the pending sectoral targets set by the Minister.)
Penalties for non-compliance remain as they were within the previous version of the Employment act and will be affected whenemployers cannot meet the compliance requirements. Employers may however justify non-compliance with numerical targets.
Justifiable reason include:
- insufficient opportunities for recruitment or promotion
- insufficient pool of individuals from the designated groups with the relevant qualifications, skills, and experience
- mergers and acquisitions
- impact on the company’s economic activities