According to the Employment Equity Act (EEA), designated employers are required to prepare and implement an employment equity (EE) plan and submit an EE report to the Department of Employment and Labour. Failing to do so can lead to fines from R1.5 million or a percentage of company turnover.
In addition, employers have to now also comply with the latest Employment Equity Amendment Bill (EEAB) which was passed by the National Assembly on 17 November 2021, and sent to the various provinces for concurrence.
As an analysis has shown that around 60% of employers are failing to comply, the Director General (DG) has issued a warning that more reviews will be executed in the coming months.
(SA)UEO has consulted Dawid Brink from Cores, to determine what the key implications of these amendments are for employers.
Employment Equity amendments to note
Arguably, the most significant amendment to the EEA is that the Minister of Employment and Labour will be able to establish numerical targets for all sectors based on criteria which the Minister may determine. As such, the following amendments will have the most significant consequences:
- Section 15A
- The Minister is empowered to prescribe numerical targets for sectors across all occupational levels.
- Section 42
- Assessment of compliance
- Section 53(6)
- A list of criteria will need to be met before an employer can obtain a compliance certificate. While this section has been in legislation but not yet implemented, it will now come into effect for any company that tenders for government contracts.
Possible red flags for companies
The sector targets will be for ‘all’ companies and not be determined on the size of the company. This may lead to difficulties for smaller companies looking to comply with sector targets, if there is no proper consultation with the sector to specify the needs of all companies on the basis of size.
What can companies do?
The full impact of the amendments will only really be known once they are promulgated. For now, companies just need to ensure that they are currently complying with the EEA, before the Inspector comes knocking. It is critical that you establish whether you are a ‘designated employer’ or not. If you are, then you need to ensure that your organisation submits an Employment Equity Report between 1 September and 15 January every year. And that your Employment Equity Plan is in place to prevent any fines for non-compliance.
MORE ABOUT CORES
Cores specialises in assisting businesses with B-BBEE scoring, skills development, and health and safety strategies and plans. This includes assessments, planning, and implementation, document preparation, training and development programmes, as well as assistance with qualifying for tax incentives and claims from the Sector for Education and Training Authority (SETA).