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How the Proposed New Amendments to Employment Equity Laws Will Affect Your Business

The proposed new amendments to the Employment Equity Act 1998 (EEA) have been making waves in the business world for some time now. These proposed changes, which were first introduced in 2020, are expected to come into effect on 1 September 2023. Their primary objective is to improve the implementation and effectiveness of employment equity in South Africa.

As a business owner, it’s essential to understand the impact these changes will have on your organisation and how to prepare for compliance. Here, we’ll delve into the two most significant changes to the employment equity (EE) laws and how they will affect your business.

Change #1: Redefining “designated employer” – who must comply?

The most significant change in the proposed amendments is the deletion of part of the current definition of “designated employer”. Currently, any employer with a total annual turnover that exceeds the threshold determined in Schedule 4 of the EEA, or with more than 50 employees, is considered a designated employer and must comply with the affirmative action provisions of the EEA.

Under the proposed amendments, the turnover threshold will be removed, and only an employer (other than a municipality, organ of state, or an employer appointed as a designated employer in terms of a collective agreement) with 50 or more employees will be considered a designated employer.

Change #2: Powers given to the Minister of Employment and Labour regarding sectoral targets

The second significant change in the proposed amendments to the EE laws pertains to the authority granted to the Minister of Employment and Labour in relation to sector-specific targets. Over the years, it has become apparent that there are larger gaps in employment equity in certain sectors. These gaps have been identified as a barrier to the achievement of equitable representation in the workplace.

The proposed amendment will allow the minister to identify the sectors that require specific employment equity targets and prerequisites. For any economic sector that has been identified, the minister may set numerical targets to ensure equitable representation of suitably qualified people from designated groups at all occupational levels in the workplace. There are 18 sectors identified in the proposed amendments, including agriculture, construction, finance, and mining.

What does this mean for your business?

The proposed amendments to the EE legislation will have a significant impact on businesses of all sizes. Here are some key considerations:

Compliance requirements

With the redefinition of “designated employer”, many small businesses will no longer be required to comply with the affirmative action provisions of the EEA. So, if you have fewer than 50 employees, your regulatory burden will be reduced, allowing you to focus on other critical aspects of your business.

However, if your business does meet the 50-employee threshold, you will still be required to go through the compliance process. This includes developing an EE plan, submitting an EE report, and implementing affirmative action measures to promote the equitable representation of designated groups in the workplace.

If your business operates in one of the 18 identified sectors, you may be subject to specific employment equity targets and requirements. The Minister of Employment and Labour will set these targets and requirements, and it will be up to your business to comply. If you fail to comply, you may face significant penalties, such as fines and reputational damage.

Impact on recruitment and employment practices

The proposed amendments are intended to promote the equitable representation of designated groups in the workplace. This means that businesses will need to ensure that their recruitment and employment practices are fair and do not discriminate against any designated group.

As an employer, you will need to review your business’s recruitment processes to ensure that they are inclusive and do not discriminate against any designated group. You will also need to ensure that your employment practices promote diversity and inclusion and that they are providing equal opportunities for all employees to advance in their careers.

Ensure compliance with EE legislation through BEE123’s services

It is important to remember that proving submission and acceptance of your Employment Equity Reports is crucial in obtaining points for Management Control and Employment Equity on your next B-BBEE scorecard. Failing to do so could result in losing out on valuable points which could affect your overall B-BBEE rating.

To ensure that your business is compliant with B-BBEE and EE regulations, it’s essential to seek the assistance of a trusted and reputable provider of solutions such as BEE123. As South Africa’s leading provider of B-BBEE and EE compliance and transformation solutions, BEE123 is dedicated to helping organisations meet the requirements of the EEA.

At BEE123, we believe that promoting diversity and inclusivity in the workplace is not only a legal requirement but also a strategic advantage. A diverse workforce brings new perspectives and ideas, which can lead to improved innovation, productivity, and profitability. By partnering with us, you can be confident that your organisation is not only fulfilling its legal requirements but also positioning itself for success in a fiercely competitive market

Don’t let compliance challenges hold your business back from achieving its full potential. Contact us today to learn more about BEE123’s solutions for promoting diversity and inclusivity in the workplace and how we can help your business succeed.