On the 12th of April 2023, South African President Cyril Ramaphosa signed the Employment Equity Bill into law, which is challenging race-based legislation. The new law is good news for companies with fewer than 50 employees, as they will no longer be considered designated employers and will not have to meet Employment Equity (EE) compliance criteria or submit annual reports. However, once a company becomes a designated employer, it must meet all the new targets outlined in the revised EE act.
The Employment and Labour Minister now has the power to regulate sector-specific EE targets and compliance criteria, and companies must achieve these targets to receive an Employment Equity Compliance Certificate necessary for doing business with the State. All South African population groups, including white people, must be considered when setting EE targets for 100% black-owned companies.
For designated employers, the new law demands more stringent compliance with EE targets. Companies must submit annual reports detailing their plans to achieve these targets, and failure to comply may result in punitive fines. Additionally, companies with more than 50 employees must submit employment equity plans and annually submit reports to the Department of Employment and Labour.
The Department of Employment and Labour is forever increasing the number of labor and health inspectors to monitor and enforce compliance with this new law. Companies must also keep up-to-date with changes to the National Minimum Wage Act, as the compliance certificate not only deals with compliance to the EE Act but also confirms that these companies pay their employees equal to or more than the national minimum wage.
Overall, the revised EE act aims to ensure that suitably qualified people from all groups have equal employment opportunities and are represented at all occupational levels in the workplace. Companies must prepare to embrace these new regulations, as they will be enforced.
Our assistance is always available for companies needing help with their compliance, please contact us for any assistance.
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