Employment Equity Reporting: To Do or Not To Do?

Employment Equity Reporting: To Do or Not To Do?

A smart business knows the answer

Every year, South African Employers are faced with the question: Should we submit our Employment Equity (EE) reports or not? While it may seem like a choice, the truth is that Employment Equity Reporting is not optional for designated employers as it is a legal obligation. Yet, many businesses still hesitate, either because of uncertainty, lack of capacity, or fear of scrutiny.

The Employment Equity Act (EEA) as amended requires designated employers to submit annual reports (EEA2 and EEA4) to the Department of Employment and Labour (DoEL). Non-compliance can lead to fines ranging from R1.5 million or 2% of turnover (whichever is greater) for repeat offenders. In addition, failure to submit may attract Director-General Reviews, where the DoEL audits your compliance records in detail.

Beyond legal requirements, EE reporting demonstrates a company’s commitment to diversity, equity, and transformation. By completing the reporting process, employers:

• Meet the requirements for eligibility for an Employment Equity Certificate of Compliance
• Build credibility with regulators, clients, and stakeholders.
• Strengthen their Broad-Based Black Economic Empowerment (B-BBEE) scorecard under the Management Control and Employment Equity elements.
• Gain valuable insights into workforce demographics and transformation progress.
• Avoid reputational risk associated with being flagged as non-compliant.

Despite the clear benefits of Employment Equity reporting, many employers continue to hesitate. Common reasons include uncertainty about whether they are classified as designated employers, the complexity of collecting data across different levels of the organisation, and the fear that reporting may expose limited transformation progress. While these concerns are understandable, failing to submit reports ultimately creates greater compliance risks and potential consequences.

Instead of viewing Employment Equity Reporting as a “grudge compliance”, employers can approach it as a strategic opportunity. Properly managed, the process allows leadership to assess gaps, identify barriers, and set actionable goals toward a more inclusive workplace.

In fact, businesses that integrate EE reporting into their HR and transformation strategies often find that they are better positioned to attract and retain diverse talent, foster innovation, and remain competitive in an evolving market.

 

The Verdict: To Do

The choice is clear. Employment Equity Reporting is both a legal necessity and a strategic advantage. While the process may feel cumbersome, the cost of ignoring it far outweighs the effort required to comply.

For designated employers, the real question is not to do or not to do, but rather how to do it better. By planning ahead, seeking expert support, and treating EE reporting as a tool for growth, organisations can ensure compliance while building stronger, more inclusive workplaces.

 

Reporting:

The EE Reporting forms require designated employers to indicate the preceding 12-month period that the report covers, except for first time reporting, where the period may be shorter.

According to the General Administrative EE Regulations, designated employers submitting their first reports electronically may do so between 1 September 2025 and 15 January 2026. Employers who prefer to submit physically may hand-deliver their reports to the Department of Employment and Labour’s head office between 1 September 2025 and 1 October 2025.

If an employer becomes a designated employer after the first working day of April, they are only required to submit their initial report in the next reporting cycle.

 

Consultation on Employment Equity Reports:
In line with the requirements for workforce analysis and the EE Plan, designated employers must consult with employee representatives on the Section 21 report before submission. To meet this obligation, many employers establish an Employment Equity Committee to facilitate consultation.

In terms of Section 16(2), employee representatives must reflect the interests of employees across all occupational levels, including both designated and non-designated groups. Where applicable, the employer is also required to consult with any representative trade union operating in the workplace.

 

What the EE Reports Cover:

EEA2 Report (Employment Equity Report)

• Provides a snapshot of the employer’s workforce profile, broken down by race, gender, and disability across all occupational levels.
• Includes details on recruitment, promotions, and terminations, showing movement in and out of the workforce by designated and non-designated groups.
• Tracks the progress made against the organisation’s Employment Equity Plan.
• Helps the DoEL monitor compliance with representation and transformation goals.

 

EEA4 Report (Income Differentials Statement)

• Focuses on remuneration data across occupational levels.
• Highlights income differentials between designated groups (e.g., race and gender categories) to identify possible unfair discrimination in pay.
• Requires employers to explain reasons for disparities and outline measures to address them.
• Supports the DoEL in promoting fair and equitable remuneration practices.

 

What happens after the report is submitted?
After submission, the DoEL will issue a response to the employer indicating one of the following outcomes:

• Once a designated employer has submitted its section 21 report, it will then be able to request a certificate of compliance in terms of section 53 of the EEA.
• The EEA2 and EEA4 reports will be sent directly to the CEO and Employment Equity Manager.
• A Letter of Acknowledgement that the submission for the applicable year has been submitted.
• The company will then be listed on the Public Register for Designated Employers who have reported for the 2025 reporting cycle.

 

A strategic imperative

Employment Equity Reporting is not merely a regulatory formality, it is a critical component of responsible, forward-looking business practice. Compliance safeguards organisations from legal and reputational risks, while also providing valuable insights into workforce diversity, representation, and equity gaps. In addition, it mitigates Fines and Penalties from the Department of Employment and Labour.

By embracing EE Reporting as a strategic tool rather than a bureaucratic exercise, organisations can drive meaningful transformation, improve employee engagement, and enhance their competitive advantage. Ultimately, the choice is clear: reporting is not optional, and doing it well is an investment in your organisation’s future.