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The employer’s guide to South Africa’s Employment Equity Amendment Act

The employer's guide to South Africa's Employment Equity Amendment Act

Jul 26, 2023 | Latest in the industry

President Cyril Ramaphosa signed the Employment Equity Amendment Act. This Amendment Act introduces several significant changes that will reshape the landscape of employment practices in South Africa.

Employment Equity Amendment Act – Prominent changes are as follows:

  • Revision of the definition of a ‘designated employer’:
    From 1 September 2023, only employers with 50 or more employees will be considered designated employers. The total annual turnover that was previously also taken into account will no longer be a consideration.

  • Numerical targets for each sector:
    The Minister of Employment and Labour was given the power to identify national economic sectors and establish numerical targets for each sector.

  • Certificate as a compliance requirement:
    The introduction of a certificate as a compliance requirement has significant implications for employers regarding agreements with the state. In order to enter into contracts with government entities, designated and non-designated employers must obtain a certificate of compliance issued by the Department of Employment and Labour.
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With the revised definition of a designated employer, smaller employers will be positively affected by a change in the definition of “designated employer”. Only businesses employing 50 or more employees will have a specific obligation to implement corrective action measures. This change aims to create more opportunities for historically disadvantaged individuals, including marginalised racial and gender groups, by promoting their representation in the workplace.
The Minister’s authority to set numerical targets for different economic sectors means that transformation objectives will be tailored for each industry. This targeted approach seeks to address specific challenges and historical imbalances within each sector. As a result, employees working in sectors such as agriculture, finance, insurance, education and others are likely to witness greater efforts by employers to promote diversity and inclusion, providing them with a more equitable work environment.
The introduction of the compliance certificate indicates a strengthened commitment to the enforcement of fair employment opportunities.
An amendment to section 21 of the Employment Equity Act, which deals with the reports as well as their annual submission by designated employers, omits a specific date for this annual submission. This amendment empowers the Minister to make regulations regarding the requirements for employers when submitting their employment equity reports.
The Amendment Act introduces robust compliance measures to promote meaningful change. Employers are required to submit detailed workforce profiles and statistics to the Department of Employment and Labour, enabling the government to monitor progress. Development of employment equity plans serve as road maps for employers to achieve their diversity and inclusion goals. The Amendment Act requires employers to develop and implement these plans, which set out specific measures to promote the representation and participation of designated groups at all levels of the business.

The big question is when what should happen at this point.

Although President Cyril Ramaphosa has signed the Amendment Act, the effective date has yet to be proclaimed by the President. The Employment Equity Act, as currently applicable, is therefore valid and employers must ensure that they comply and fulfill all existing obligations.

It is clear that being proactive plays a crucial role in taking the necessary steps to comply with this legislation. In a rapidly changing world, being proactive is not just a desirable trait, but a necessity.

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