In the dynamic landscape of South African business, particularly for large and JSE-listed companies, staying ahead of regulatory changes is paramount. The recent amendments to the Employment Equity Act (EEA) present both challenges and opportunities for HR and Transformation professionals. At BEE123, we understand the complexities involved, and this series aims to provide a clear, actionable roadmap to ensure your organisation not only complies but thrives in this evolving environment.

As Head of Advisory at BEE123, I leverage years of experience in B-BBEE and Employment Equity to guide organisations through these intricacies. Our team’s deep understanding of the regulatory framework, combined with practical implementation strategies, positions us as a trusted partner in your transformation journey.

Designated Employer: Redefining the Scope

The cornerstone of EE compliance lies in understanding the definition of a “Designated Employer.” As of January 1, 2025, a significant shift has occurred. The repeal of subsection B, which previously included employers with fewer than 50 employees but high annual turnover, simplifies the definition. Now, the core focus is on:

• Employers with 50 or more employees.
• Municipalities.
• Organs of state (excluding certain security and defense entities).
• Employers bound by collective agreements designating them as such.

Actionable Insights:

• Organisations that previously reported under the repealed subsection B should not deregister. The Department of Employment and Labour (DoEL) will be conducting roadshows to clarify the new reporting requirements.
• Ensure your HR systems accurately reflect the current employee headcount to determine your designated employer status.
• Maintain open lines of communication with the DoEL to stay abreast of any further updates.

Applicable Sector: Navigating Sectoral Targets

A key amendment empowers the Minister of Employment and Labour to set sectoral numerical targets. These targets, outlined across 18 sectors, serve as targets for designated employers’ five-year goals.

Furthermore, Regulation Gazette No. 52515 stipulates a crucial choice: designated employers must select either national or provincial Economically Active Population (EAP) demographics for their reporting. Critically, these cannot be used concurrently.

• Employers operating in multiple provinces must opt for the EAP of the province with the majority of their employees.
• Employers operating in multiple sectors must align with the sector employing the majority of their workforce.
• Once a selection of EAP has been made, this selection is final for the 5-year target period.

Actionable Insights:

• Conduct a thorough analysis of your current workforce representation against both national and sectoral EAP demographics.
• Select the EAP that aligns with your organisational structure and operational footprint.
• Remember, this EAP selection is a fixed choice, therefore, careful consideration is needed.

EE Manager (Section 24): Ensuring Accountability

Section 24 of the EEA underscores the importance of assigning senior management responsibility for EE plan implementation. This mandate requires employers to provide these managers with the necessary authority and resources to fulfill their duties.

Actionable Insights:

• Formalise the appointment of an EE Manager through a clear appointment letter, outlining their responsibilities and authority.
• Ensure the appointed manager has the necessary resources and support to effectively drive your EE initiatives.
• Be aware that non-compliance with Section 24 can result in significant monetary penalties.

Looking Ahead:

By proactively addressing these key areas, companies can not only ensure compliance but also drive meaningful, lasting change within their organisations.

At BEE123, we are committed to empowering your organisation with the knowledge and tools necessary to navigate the evolving EE landscape. Let’s partner to build a more equitable and inclusive future for South African business.

In Part 2 of this series, we will expand on the practical steps needed to ensure compliance, focusing on the essential roles of EE Committees, Workforce Training, and the importance of meticulous meeting documentation.