EMPLOYMENT EQUITY TARGETS; WHY COMPLIANCE CAN NO LONGER BE A TICK BOX EXERCISE
South Africa's Employment Equity landscape has changed significantly. For designated employers, compliance is no longer simply about submitting an annual report and maintaining an Employment Equity Plan on file.
The Employment Equity Amendment Act 4 of 2022 came into operation on 1 January 2025, followed by the publication of five year sectoral numerical targets for 18 economic sectors in April 2025. Designated employers with 50 or more employees must now align their Employment Equity Plans with the applicable sector targets and establish annual numerical goals that contribute towards those five year targets.
What has changed?
The new framework places greater emphasis on measurable progress.
The sectoral targets apply to the four upper occupational levels:
Top Management
Senior Management
Professionally Qualified and Middle Management
Skilled Technical and Junior Management
Employers must consider their workforce profile, the applicable economically active population, recruitment and promotion trends, turnover and other relevant factors when setting their annual targets.
Importantly, the regulations also recognise that businesses may have legitimate reasons for falling short of a target. These can include insufficient recruitment or promotion opportunities and a lack of suitably qualified candidates. The key is that any departure from the applicable targets must be properly supported and justifiable.
The compliance pressure is real
The Department of Employment and Labour reported that only 181 of 1,948 employers reviewed during the 2025/26 financial year were found compliant with Employment Equity legislation. That represents a compliance rate of just 9%.
For organisations that do business with the State, the consequences can be even more significant.
Section 53 of the Employment Equity Act provides for an Employment Equity Compliance Certificate as a prerequisite for doing business with organs of state. The Department has confirmed that employers seeking State contracts must meet the applicable compliance requirements, including reporting obligations, annual targets and other statutory requirements.
What should employers be doing now?
Employment Equity should be integrated into the way the business manages people rather than treated as an annual reporting exercise.
Start by asking:
Is our current workforce profile accurately reflected in our Employment Equity data?
Are our annual targets aligned with the applicable sectoral targets?
Can we demonstrate how recruitment, promotion and succession planning support those targets?
If we are falling short, can we substantiate the reasons?
Can we demonstrate meaningful consultation with employees and the relevant structures?
The bigger picture
Employment Equity compliance is increasingly becoming a business governance issue.
The organisations that approach it as an annual form filling exercise may find themselves reacting to compliance problems after they arise. Organisations that integrate Employment Equity into workforce planning, recruitment, succession and development are better positioned to demonstrate meaningful progress.
The question is no longer simply whether your Employment Equity report was submitted. The question is whether your business can demonstrate a credible plan for where its workforce is going.
