The Department of Employment and Labour has warned businesses that the deadline for employment equity reporting is looming, as it prepares for new transformation laws to come into effect in the country this year.
The department said that designated employers need to submit their annual 2022 employment equity (EE) reports by 15 January 2023 at midnight. Failure to do so could see businesses face fines and other penalties, it said.
The submission of annual equity plans is prescribed in accordance with the Employment Equity Act of 1998.
Employers are expected to submit their EE report in terms of the Employment Equity Act and must contain the prescribed information and be signed by the Chief Executive Officer of the designated employer, it said.
The purpose of Employment Equity Act is to promote equal opportunity and fair treatment in employment through the elimination of unfair discrimination, implementation of affirmative action measures to redress the disadvantages in employment experienced by designated groups and to ensure their equitable representation in all occupational levels in the workforce.
This year’s submission of EE report plans coincides with the year in which the amended EE legislation is expected to take effect once the amended EE Bill has been signed into law, the department said.
The Employment Equity Amendment Bill, 2020 was passed by Parliament (National Assembly and National Council of Provinces) on 17 May 2022 and is awaiting assent and signing into law by President Cyril Ramaphosa.
The new laws are set to come into operation in September 2023.
The main objectives of the amendments are to empower the Employment and Labour Minister to regulate sector-specific EE targets and to regulate compliance criteria to issue EE Compliance Certificate in terms of Section 53 of the EE Act.
This means that organisations, especially those that do business with the state, will have to be in good standing when it comes to compliance with EE.
According to legal experts, a key aspect of the changes in the law relates to the term “designated employer” – the businesses which have to submit things like EE reports – as it is these employers that the laws directly address.
Under the current act, a “designated employer” is an employer that employs 50 or more employees or an employer that employs fewer than 50 employees but has an annual turnover that is equal to or above the threshold determined by the EE Act, depending on the relevant sector.
This designated employer definition has now changed under the amended bill in those employers that employ fewer than 50 employees, irrespective of their annual turnover, will no longer form part of the designated employer definition and, therefore, will be exempt from compliance.
This is quite a significant change as these companies will not be required to implement measures to ensure suitably qualified people from designated groups have equal employment opportunities and are represented at all occupational levels in the workplace
For the big businesses that fall under the definition of a designated employer, however, the most impactful change is the empowerment of the employment and labour minister to regulate sectorial EE targets and compliance criteria.
This means EE targets for different sectors will be at the minister’s discretion. While these targets are not yet known, 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.
Even businesses that do not necessarily deal directly with the state will need to comply with the law.
Acting deputy director-general of Labour Policy and Industrial Relations, Thembinkosi Mkalipi, said a new EE online assessment system would be created to monitor the implementation of sector targets, and the assessment will be done annually