Features and advantages of the latest Employment Equity Amendment Bill

Features and advantages of the latest Employment Equity Amendment Bill

features and advantages of the latest Employment Equity Amendment Bill

There has been a lot of speculation regarding the new Employment Equity Amendment Bill that was gazetted earlier this year, with the focus on two pressing factors, one being Industry Related EAP targets and the other the implementation of more specific affirmative action targets in the workplace.

Let’s have a look at how these factors will influence private companies.

For ease of reference we have outlined the salient points below:

 

What are the changes in the definition of ‘designated employer’?

  • The new Amendment Bill intends to revise the definition of a ‘designated employer’ by excluding employers with fewer than 50 employees, regardless of their annual turnover. Therefore, one advantage of the new Amended Bill will be that is has little regulatory impact on smaller employers and even voluntary reporting will be affected.
  • These amendments are a welcome relief from the regulatory burden already placed on small and medium employers. Exempting smaller employers will enable these companies to focus instead on other challenges, especially considering the pressure on companies during the national lockdown. 
  • According to the 2020 report of the Commission for Employment Equity (CEE), it is clear that government needs to be particularly concerned about the pace of transformation at top management level. The report states that white South Africans occupied 65,6% of Top Management positions in 2019, compared to 66,5% in 2018, while black South Africans represented 15,2% of Top Management in 2019 compared to 15,1% in 2018. This is particularly concerning for government as approximately two-thirds of top managers are still white.

What happens when the Amendment Bill becomes law?

If the gazetted Amended Bill becomes law, the Department of Labour will not only determine how many designated employees are required at a specific occupational level, but also the sub-sectors and from which regions these employees should come from.

What are the employer’s obligations?

Employers will be obliged to set goals that are aligned to the targets set by the Minister for that specific industry. These goals will need to address factors such as–

  • the number of designated employees;
  • the designated groups; and
  • the Occupational level.

Another important new factor to take into consideration is that should a company wish to conduct business with a government institution, they will have to provide a certificate from the Minister of Labour confirming their compliance with these set targets. 

Further to the new changes that we can expect, it remains imperative for companies to report, given the following realities:

  • Businesses that fail to comply could face hefty fines of up to R2.7 million or 10% of their annual turnover for first offenders.
  • The Employment Equity report directly impacts compliance with Broad-Based Black Economic Empowerment (B-BBEE or BEE) and therefor failure to comply as an employer the company will be unable to accumulate any points on the Management and Control element for such clients.

In conclusion

Companies will face a few challenges as their goals and targets need to be aligned to that of their region and industry, while smaller companies will most probably be exempt from reporting.

SERR Synergy assists businesses with all the necessary legal aspects around the Employment Equity Act. Should you feel unsure about the new amendments, our team can assist you and offer you the services to put your mind at ease. Our Skills Development Facilitators are ready and competent to assist and will ensure that you are audit ready for Department of Labour Inspections.

We encourage our clients and other impacted businesses to contact us for specific guidance on how these amendments are likely to affect them.

About the Author: Madeleine Gericke obtained an Honours degree in Health and Social Psychology from the University of South Africa in 2012 and has more than 15 years’ experience as a Skills Development and Employment Equity Consultant. She is currently working at SERR Synergy as a Skills Systems Developer. 

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