Changes to Employment Equity Act will impact employer obligations

26 June 2024 2 min read

At a glance

There are a number of changes to the Employment Equity Act 1998 (EEA) which have been signed into law but will only come into effect on a date still to be announced.
The changes impact on employers’ obligations in respect of affirmative action, equity plans and sector targets.
Fines for breaches of the EEA will also be increased.

The future changes to the EEA include:

Requiring employers to implement affirmative action measures to ensure that people from designated groups are equitably represented in all levels of the organisation in a way that mirrors as far as possible the demographics of the country or of the province in which the business operates.

Changes to the requirements to submit an equity plan and employment equity reports. Currently, a company’s employment equity plan sets out the company’s goals and objectives and how it plans to achieve those objectives with regard to employment equity. There is also a requirement on ‘designated employers’ to submit annual employment equity reports to the Department of Labour. The requirement to have a plan and submit reports currently applies to employers who have more than 50 employees, or whose annual turnover meets the threshold set for that particular sector. The amendments, once in effect, will take away the turnover threshold so that if a company has fewer than 50 employees it will not have to submit reports or plans, irrespective of its turnover. This amendment is intended to reduce the regulatory burden on small businesses.
Certain changes to the regulation of employment equity plans.

Government setting of sector targets. One of the significant changes to the EEA is that, currently, an employer sets its own numerical targets based on the demographics of the country or province in which it operates and the pool of suitably qualified candidates in the different occupational levels within the business.
However, once the amendments to the EEA come into effect, that power will be taken away from the employer and the government will set the numerical targets in respect of each sector. This will have the effect of requiring employers to strive to meet the targets set for their sector by the government.
This is an important change because in order to receive an employment equity compliance certificate from the government, employers will need to be able to demonstrate that they have not received any complaints of unfair discrimination, and that the employer has met the pre-determined targets for its sector. Where the employer does not meet those targets it will have to explain why it has not met the target.
Those employers who do not receive a compliance certificate will be barred from submitting tenders to do government work. The targets will be five-year targets.