EMPLOYMENT EQUITY ACT

“DESIGNATED EMPLOYERS”

A “designated employer” is any employer with 50 or more employees.

Take note: Should a “designated employer” fail to comply with legislation, the fine for the first offence is R1.5 million or 2% of the employer’s annual turnover (whichever is the greatest). For repeat offenders it is R2.7 million or 10% of the employer’s annual turnover (whichever is the greatest).

Are you a “designated employer”?

The definition of “designated employer” has changed with effect from 1 January 2025 after the President of the Republic of South Africa made a proclamation late in 2024 that the Employment Equity Amendment Act No.4 of 2022 (“EEAA“) shall come into operation from the beginning of 2025.

The amendments have the effect of removing the turnover threshold so that only employers with more than 50 employees will be regarded as “designated employers” for the purposes of the Employment Equity Act No.55 of 1998 (“EEA“).

This means that employers with less than 50 employees will not need to comply with the affirmative action provisions in the EEA and will accordingly not need to have an employment equity plan in place and to submit employment equity reports on an annual basis

What is expected of a “designated employer”?

“Designated employers” have additional obligations and must take care to ensure the following is in place:

1. Appoint a Senior Employment Equity Manager to develop, monitor, and implement the Employment Equity Plan (see step 7 below).

2. Collect information– each employee must complete the EEA1 form confirming the employee’s race, gender, nationality, and any disabilities where applicable.

3. Create employment equity awareness with regards to all employees.

4. Establish an Employment Equity Committee to hold regular consultations with regards to compliance with the EEA.

5. Hold regular (at least quarterly) consultations to discuss the conducting of an analysis, development of a plan, and submitting of the reports to the Department of Employment and Labour.

6. Draft an analysis (EEA12) which must include the following:

• Policies and procedures to address the under-representation of designated groups and a lack of diversity in the workplace
• Practices and factors to promote employment equity
• Under-representation of designated groups and occupational levels

7. Draft an Employment Equity plan (EEA13) which must state the following:

• Objectives for each year (the plan is valid between one to five years)
• Affirmative action measures
• Numerical goals for achieving equitable representation
• A timetable for each year
• Internal monitoring and evaluation procedures, including internal dispute resolution mechanisms
• Identified persons to monitor and implement the plan

8. Submit Employment Equity reports (EEA2 and EEA4) annually on progress made with regards to the implementation of the plan.

Deregistration as a designated employer

Apply for deregistration: If you were previously registered and no longer meet the criteria of a designated employer, you must complete the prescribed documents and apply to the relevant authority (Director-General) at the Department of Employment and Labour for deregistration from the EE register.

Contact us at Employment Equity | Labour Quest to assist you with the application for deregistration from the EE register asap!