With the recent amendments to the Employment Equity Act No. 55 of 1998 (“EEA”), which came into effect on 1 January 2025, employers must understand how these changes impact their obligations.
The updated legislation introduces significant shifts, particularly in reporting requirements, sector-specific targets and compliance measures. Here’s what you need to know and how to ensure your business remains compliant.
Who does the amended Act apply to?
The revised EEA now applies to all employers, regardless of size. However, the definition of a “designated employer” has been refined – only businesses with more than 50 employees fall under this category. This means that while all employers must be aware of employment equity principles, smaller businesses (those with fewer than 50 employees) are exempt from certain obligations, such as submitting Employment Equity (EE) reports.
Key changes and their implications
1. Exemption for small businesses
Previously, small businesses had to comply with Chapter III of the EEA, which included employment equity planning and reporting. Now, businesses employing fewer than 50 people are exempt from submitting EE reports, easing the regulatory burden on SMEs. However, these businesses must still adhere to broader principles of fair employment practices.
2. Sector-specific employment equity targets
A significant update is the introduction of sector-specific numerical targets. The Minister of Employment and Labour can now set equity targets tailored to different industries, ensuring balanced representation of designated groups (race, gender and disability) across all occupational levels. Employers must monitor announcements in the Government Gazette, as these targets will differ based on industry and regional factors. Businesses will have 30 days to provide input on proposed targets before they are finalised.
3. Stricter consultation and reporting requirements
Designated employers must actively consult with trade unions and employee representatives when implementing employment equity plans. The aim is to ensure transparency and collaboration in meeting the new sector-specific targets.
In addition, designated employers with fewer than 150 employees must now submit annual EE reports instead of every two years. This means increased administrative oversight, requiring businesses to maintain up-to-date employment equity plans and documentation.
4. Increased compliance monitoring and enforcement
Labour inspectors now have expanded authority to enforce compliance. Employers must be prepared for increased scrutiny, as inspectors can issue compliance orders for:
- Failing to consult with employees on employment equity matters
- Not implementing employment equity plans
- Not submitting required reports
Additionally, employers must demonstrate compliance with their sector’s targets during inspections. A failure to meet these requirements may result in penalties or difficulties obtaining government contracts.
5. Certification of Compliance
Businesses seeking to engage in government work must obtain a Certificate of Compliance, which is only issued to employers who:
- Meet numerical employment equity targets
- Submit the required EE reports
- Have no recent findings of unfair discrimination or wage violations
This means that companies wishing to do business with the state must prioritise employment equity compliance to avoid operational setbacks.
What should employers do next?
With these amendments in place, employers should take proactive steps to ensure compliance:
- Assess your business category: Determine whether you fall into the designated employer category (50+ employees) and understand your specific obligations.
- Stay informed on sectoral targets: Monitor Government Gazette announcements for industry-specific employment equity targets and prepare to align with them.
- Enhance consultation processes: Establish clear communication with trade unions and employee representatives to ensure transparency in employment equity planning.
- Ensure accurate record-keeping: With the shift to annual reporting for designated employers with fewer than 150 employees, maintain meticulous records to streamline compliance.
- Plan for compliance inspections: Review employment equity plans, ensure reporting is up to date and be prepared for potential compliance audits by labour inspectors.
Final thoughts
The 2025 EEA amendments aim to create a more equitable workforce while streamlining regulatory compliance. However, they also bring stricter enforcement and heightened expectations for employers. By staying informed, consulting with employees and proactively aligning with sector-specific targets, businesses can navigate these changes effectively and remain compliant.
For more guidance on how these changes impact your business, consult with a legal expert to ensure you are fully prepared for the evolving employment equity landscape.
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This article was authored by Shanice Chibonda under the supervision of Nelson Tjiane.