Employment Equity Amendment Bill

Employment Equity Amendment Bill signed into law

As of 12 April 2023, President Cyril Ramaphosa signed into law the Employment Equity Amendment Bill of 2020 (the “Amendment Bill”). This bill amends the Employment Equity Act 55 of 1998 (the “Act”), with aims to encourage a more diverse and equitable workforce.

Previously, “designated employers” were defined as employers who employ 50 or more people, or have a total annual turnover as reflected in schedule 4 of the Act. Now, “designated employers” are defined employers with more than 50 employees, regardless of turnover, and will be required to comply with the Act. These employers are required to submit their employment equity plans and define how they aim to achieve their targets. This brings some reprieve for employers that employ less than 50 employees, as they will no longer need to submit employment equity plans, relieving them of this administrative burden. 

The Amendment Bill empowers the Minister of Employment and Labour to set employment equity targets for economic sectors and geographic regions. Currently, it is still unclear what the economic sector and geographic targets for compliance are, however, the purpose of the targets is to ensure equitable representation from designated groups, based on race, gender and disability, at all occupational levels within the workforce, in relation to geographic location. Designated employers will have to keep a close watch on the regulations that the Minister puts in place as it has a significant practical impact on the way that they are compliant with the Act. Although the targets are at the Minister’s discretion, he has been in discussions with various industry stakeholders to draw up the relevant targets. Before these targets can be set, the Minister will need to publish a notice of the economic sectors, engage in consultation, issue regulations prescribing the criteria to be used and take advice from the National Wage Commission. 

The employer’s Employment Equity Plans numerical targets need to align with the sectoral targets, and where they do not, the employer needs to provide a reasonable justification as to why they are not aligned. This should be set out in the employer’s Employment Equity Plan. 

The amendment compels labour inspectors to inspect workplaces and issue employers with compliance orders. Furthermore, the Minster of Employment and Labour will regulate compliance by issuing Compliance Certificates as per section 53 of the Act. Any employer wanting to do business with government will be required to submit a certificate from the Department confirming that they are in compliance with the Act. This Certificate of Compliance will confirm if the employer pays their employees more than the national minimum wage. In addition, the law requires employers to pay employees equal pay for equal work.  

If you need assistance with regards to navigating the changes to the Amendment Bill, please do not hesitate to contact us.

Zahn Abreu

B-BBEE Consultant & Business Development Manager, Johannesburg