Implications of the amended Equity Act
Authors: Darryn Mer– Consultant
It is anticipated that with effect from 1 September 2023 certain changes will be made to the Employment Equity Act (EEA). Employers will need to be aware of these amendments as they may affect specific employers, depending on their number of employees.
Employers with more than 50 employees will be considered designated employers. This changes the focus from total annual turnover, which was the previous consideration, to the staff complement. Smaller businesses that employ fewer than 50 people will no longer have the same obligations.
The Minister of Employment and Labour will now be able to set targets for certain sectors. In essence, this means that sectors will be subject to specific obligations in respect of transformation. Sectors such as Education, Agriculture, Finance, and Insurance have already been consulted, and further sectors are to be scrutinised. Employers are encouraged to stay abreast of developments, as they may affect the sector in which their business operates. In order to contract with the government, a certificate of compliance needs to be issued by the Department of Employment and Labour.
The certificate reflects that the employer has complied with its employment equity obligations and its sectoral numerical targets. It also covers the submission of annual employment equity reports, the absence of any unfair discrimination, and no outstanding CCMA awards in respect of non-payment of the national minimum wage.
Larger organisations as well as employers that intend to do business with the state are encouraged to fully understand the practical implications and how the amendments affect their businesses. These businesses will need to ensure that their employment equity plans align with the sectoral targets set for the sector in which they operate.
Lawtons Africa is a South African law firm. With roots that grew out of seeds sown in down-town Johannesburg in 1892, our history features various changes and different names. Our team of lawyers, including directors, consultants, associates and candidate attorneys is highly qualified, market-recognised and skilled. For further information, visit www.lawtonsafrica.com