This blog was co-authored by Raees Halim, Candidate Attorney.

On 12 November 2024, the Minister of Employment and Labour (the Minister) signed the long-awaited Employment Equity Amendment Act, 2022 into force with effect from 1 January 2025.  The Amendment Act can be read here.

The Amendment Act introduces several significant changes to the Employment Equity Act, 1998 (EEA).  These changes include the following:

The definition of “Designated Employer”:

Employers with less than 50 employees, irrespective of annual turnover, will no longer be required to implement affirmative action measures in terms of Chapter III of the EEA. This change reduces the administrative burden on smaller employers, as they are exempt from the obligations currently imposed on designated employers.

Updated definition of “People with Disabilities”:

The definition will include people with long-term or recurring physical, mental, intellectual, or sensory impairments, which, when interacting with various barriers, may substantially limit their prospects to enter or advance in employment. This aligns with the definition in the United Nations Convention on the Rights of Persons with Disabilities (2007) and broadens the scope to better reflect diverse forms of disability.

Sectoral targets:

Section 15A of the Amendment Act allows the Minister, after consultation, to identify specific national economic sectors and to set numerical employment equity targets for each sector. This is coupled with the insertion of the definition of “sector” which means an industry or service, or part thereof. The amendment seeks to ensure that employment equity is tailored to sector-specific needs and challenges.

The Minister published draft regulations on 1 February 2024 to provide for the proposed 5-year sectoral targets – these will come into effect when they are published in final form, potentially, sometime in January 2025. The draft regulations clarify factors which designated employers must consider when developing their employment equity plans to achieve the 5-year targets and guide them on the implementation of affirmative action measures. The draft regulations can be read here.

Numerical targets in Employment Equity Plans (EE Plans) and compliance:

Section 20 already requires designated employers to include numerical targets in their EE Plans. From next year, these targets must comply with the sectoral targets set for their specific industry. Whether a designated employer complies with the EEA will no longer only be assessed on internal employment equity efforts but by whether employers have met the sectoral targets. This adds an extra layer of accountability.

Certificate of Compliance:

Section 53 requires designated employers who enter into contracts with the State to comply with both Chapters II (Prohibition of Unfair Discrimination) and III (Affirmative Action) and to obtain a certificate of compliance from the Minister.  Non-designated employers must comply with Chapter II. Employers may also complete a declaration of compliance, which will serve as proof of their compliance, once verified by the Department of Employment and Labour (DOL). To receive a certificate, employers must meet the sectoral targets for their industry, submit timely reports to the DOL and must not have received a CCMA award against it in the preceding 12 months relating to a dispute about paying the national minimum wage or unfair discrimination. This certificate will be employers’ ticket to play in the public space. Every employer that wants to contract with the State will have to present this certificate or declaration or show a reasonable ground for non-compliance.

Reporting to the DOL:

The EEA previously contained strict time frames during which a designated employer was required to submit a report to the Director-General of the DOL (i.e. the first working day of October). The Amendment Act has removed the fixed period, affording employers a reasonable reporting period, provided the reports are still submitted annually.

Designated employers have only 4 weeks left to familiarise themselves with these changes. It is imperative that you have a good understanding of:

  • What sector your business fall under
  • The targets that will apply to your sector
  • How your business’ numerical figures compare to the sectoral targets
  • What measures the business can implement to achieve the sectoral targets
  • What steps the business must take to ensure that it complies with the EEA and will obtain a certificate when needed.

Non-compliance with the EEA may have a major effect on your business. Please reach out to our Employment & Labour team if you require assistance.