New Employment Equity Amendment Act: Compliance is achievable

Nicol Myburgh, head of HR Services at CRS outlines some changes businesses face following the Employment Equity Amendment Act (EEA) 4 of 2022 coming into effect

It introduces some important changes, including a revised definition of the term “designated employer” and sector-specific employment equity (EE) targets set by the Minister of Employment and Labour.

The implications of these changes depend largely on your company’s size and whether you work with state-owned entities.

SMMEs

“For small businesses with fewer than 50 employees, there’s some good news. They are no longer classified as ‘designated employers’, which means they are exempt from creating EE plans and submitting EE reports to the Department of Employment and Labour.”

He adds that those who want to do business with the government will still be able to acquire a certificate of compliance.

“As long as they adhere to Chapter 2 of the EE Act on the Prohibition of Unfair Discrimination, and the National Minimum Wage Act, 2017,” he says.

Larger companies

For larger companies defined as designated employers, the stakes are a bit higher.

“These businesses must meet the sectoral EE targets set by the Minister of Employment and Labour to obtain a compliance certificate,” Myburgh notes.

“Companies will not be able to trade with the state without this certificate, which could have a devastating impact on their business operations, especially if the bulk of their revenue comes from state contracts.”

Options to meet the requirements

Even if the new requirements seem challenging at first, companies concerned about complying, need to know that businesses that staying compliant is achievable.

So even if your business struggles to meet the sectoral targets, there are still options.

Meeting your EEA obligations doesn’t have to be overwhelming.