EMPLOYMENT EQUITY PLANS DUE - 1 SEPTEMBER 2025

As from1 January 2025, new sections of the Employment Equity Amendment Act 04 of 2022 will be in effect. These updates aim to improve workplace fairness by refining definitions, introducing new sector-specific targets, and updating reporting rules.

Please refer to the Previous EOHCB Newsletter on changes to the Employment Equity Amendment Act 04 of 2022: https://www.eohcb.co.za/post/changes-to-the-employment-equity-act

IMPORTANT: These changes do not affect reporting obligations. Employers must continue to submit their reports.

Non-Designated Employers:

Business owners with fewer than 50 employees have specific obligations under the Employment Equity Act (EEA) as amended. Here's a detailed breakdown of their responsibilities:

1. Small businesses with fewer than 50 employees are generally considered "non-designated employers" under the EEA. This classification exempts them from certain obligations that apply to larger companies.

2. Despite being non-designated employers, small businesses must still comply with Chapter 2 of the EEA, which prohibits unfair discrimination in the workplace. This means they must:

• Ensure equal opportunities for all employees and job applicants.

• Avoid discrimination based on race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, or birth.

3. Small businesses should promote equal opportunity and fair treatment in the workplace through:

• Eliminating unfair discrimination in any employment policy or practice.

• Implementing measures to promote diversity.

4. They must have procedures in place to deal with disputes about unfair discrimination.

5. Employers should have policies in place to protect employees with HIV/AIDS from discrimination.

6. Small businesses must provide reasonable accommodation for people from designated groups (i.e., black people, women, and people with disabilities) to ensure equal opportunities and equitable representation in the workforce.

7. Unlike designated employers, small businesses with fewer than 50 employees are not required to submit annual Employment Equity Reports to the Department of Labour.

8. They are not obligated to develop and implement a formal Employment Equity Plan.

9. Small businesses are not required to implement affirmative action measures as outlined in Chapter 3 of the EEA.

10. While not mandatory, small businesses can voluntarily adopt employment equity practices to enhance their competitiveness and social responsibility.

11. Although not required to submit reports, it's advisable for small businesses to maintain records of their employment practices to demonstrate compliance with non-discrimination principles if challenged.

12. Employers should ensure that all employees are aware of the provisions of the EEA and the business's commitment to non-discrimination.

While small businesses with fewer than 50 employees have fewer formal obligations under the Employment Equity Act, they must still ensure a non-discriminatory work environment and promote equal opportunities. It's advisable for these businesses to stay informed about best practices in employment equity and consider voluntary measures to enhance workplace diversity and inclusion.

Designated employers:

A designated employer is any business with 50 or more employees, regardless of turnover. These employers are legally required to implement affirmative action measures, set sectoral numerical targets, and submit Employment Equity (EE) reports to the Department of Employment and Labour. The amendments have removed turnover-based classification, meaning only workforce size determines designation.

Duties of Designated Employers

EEA1 - Information Collection and Workforce Analysis

1. When gathering workforce information as required by Section 19 of the Act, designated employers must request each employee to complete a declaration using the EEA1 form.

2. If an employee refuses to complete the EEA1 form or provides inaccurate details, the employer may determine the employee’s designation using reliable historical and existing data. Employees with disabilities retain the right not to disclose their disability status.

3. Employers must analyse their workforce profile, employment policies, procedures, practices, and work environment to identify barriers that hinder equitable representation of designated groups across occupational levels. The findings must be documented using the EEA12 template.

4. When collecting information and conducting the required analysis, employers must refer to the applicable Codes of Good Practice issued under Section 54 of the Act as a guideline.

Obligation to Develop and Implement an Employment Equity Plan (EE Plan)

1. Designated employers must establish and execute an EE Plan covering the period from 1 September 2025 to 31 August 2030.

2. Employers attaining designated status after 1 April 2025 must formulate an EE Plan for the remaining duration until 31 August 2030.

3. When drafting their EE Plan in accordance with Section 20 of the Act, designated employers must consult the relevant Codes of Good Practice issued under Section 54.

4. The EE Plan must incorporate, at a minimum, all components outlined in the EEA13 template within these regulations.

5. Employers must consider the following factors when developing EE Plans and setting annual numerical targets as per Section 20(2) of the Act:

• Workforce profile,

• Applicable five-year sectoral numerical targets, and

• Economically Active Population (EAP).

6. In addition to these factors, employers may also consider:

• The inherent requirements of specific positions,

• The availability of qualified candidates,

• Relevant formal qualifications, prior learning, experience, or capacity to acquire necessary skills within a reasonable time (as defined in Sections 20(3) to (5) of the Act),

• Workforce turnover and natural attrition rates, and

• Hiring and promotion trends within the organization.

Sectoral Compliance and Target Setting

7. Designated employers must:

• Align with numerical targets set for their economic sector under Section 15A(3),

• Review the Ministerial notice issued under Section 15A and EEA17 to determine their applicable sector, and

• If operating across multiple sectors, apply the numerical targets for the sector where most employees are engaged.

8. The five-year sectoral numerical targets established under Section 15A(2) of the Act are critical for ensuring demographic alignment within the top four occupational levels and for improving representation of persons with disabilities.

9. Employers must set annual EE targets to progressively meet five-year sectoral numerical targets, specifying numerical targets for all designated groups within the top four occupational levels while considering applicable sector targets and the EAP.

10. Employers must avoid over-representing any group beyond the applicable EAP at specific occupational levels.

11. If an employer has already surpassed the numerical target for a designated group within an occupational level, they must ensure targets continue to align with the EAP.

12. Employers must establish numerical goals and annual EE targets for semi-skilled and unskilled occupational levels within their EE Plans in accordance with Section 20(2) of the Act, considering the applicable EAP.

13. Compliance will be measured against annual targets set to achieve the relevant five-year sectoral numerical targets.

14. Employers will not face penalties if they can provide reasonable justification for failing to meet a target, as outlined in Section 53(6)(b) and Section 42(4) of the Act.

15. Employers must retain their EE Plan for five years following its expiry.

16. To distinguish between different occupational levels, employers must refer to EEA9 regulations for guidance.

Reporting Obligations for Designated Employers

Annual Submission Requirements

1. Designated employers must submit an annual report to the Director-General in accordance with Section 21 of the Act using one of the following methods:

• Physical Submission: Delivering a completed EEA2 form (as per regulation 10(2)) along with the EEA4 form (as per regulation 12).

• Electronic Submission: Using the Department’s online reporting system available at www.labour.gov.za.

2. If submitting a report by hand, the employer must provide signed copies of the EEA2 and EEA4 forms, authorized by the Chief Executive Officer or Accounting Officer, to the Department’s Head Office within the reporting period (1 September to the first working day of October). This allows for immediate data capture and feedback.

3. Employers opting for online submission must do so between 1 September and 15 January of the following year.

4. Employers attaining designated status after the first working day of April are required to submit their first report in the next reporting cycle.

5. Newly designated employers will not be assessed for compliance with annual targets in their initial report.

6. Employers must submit a compliant report to receive a certificate under Section 53(2) of the Act.

7. Holding companies that oversee multiple registered entities may submit a consolidated report, provided they:

• Maintain a comprehensive EE Plan that encompasses individual EE Plans for each registered entity included in the report.

• Ensure consistent reporting throughout the plan’s duration.

8. All submitted reports must be verified and authorized by:

• The Chief Executive Officer, or

• The Accounting Officer (if the employer falls under the Public Finance Management Act, 1999 or Municipal Finance Management Act, 2003).

9. Employers must immediately notify the Director-General in writing of any changes to:

• Trade name

• Chief Executive Officer, Accounting Officer, or managers assigned responsibilities under Section 24 of the Act.

10. Employers unable to submit reports must inform the Director-General in writing by the last working day of August, explaining their reasons and providing evidence via the EEA14 form.

11. Upon submission, the Department will provide one of the following:

• A rejection letter if the report fails to comply with regulatory requirements.

• A correction request, identifying errors that must be rectified within a specified period.

• An electronic acknowledgment confirming successful submission into the Department’s EE system.

12. Employers receiving an error notification must submit corrections within the stipulated timeframe.

13. Employers must retain a copy of the submitted report for five years after it has been submitted to the Director-General in terms of section 21 of the Act.

14. Public companies classified as designated employers must publish a summary of their EEA report in their annual financial report under Section 22 of the Act, incorporating relevant details as specified in the EEA10 form.

Additional Employer Obligations

Employers must display the Summary of the Act (Annexure EEA3) at their workplace as required under Section 25(1).

Income Differentials and Discrimination

1. Employers must submit an Income Differential Statement under Section 27 using the EEA4 form to the National Minimum Wage Commission, either:

• Physically, or

• Electronically via the Department’s online system.

2. Newly designated employers (from the first working day of April onward) must submit their first Income Differential Statement in the next reporting cycle.

3. Employers must retain a copy of the statement for five years.

4. The EEA4 form is not a public document.

Enforcement Mechanisms

Labour inspectors may request a written undertaking from designated employers under Section 36, using the EEA5 form.

If necessary, a compliance order may be served under Section 37 using the EEA6 form.

Compliance orders may be delivered to employers via:

• Direct handover to the employer or an authorized representative.

• Leaving a copy at the employer’s premises or registered office.

• Emailing a copy to the employer.

Director-General Review

Employers selected for review by the Director-General under Section 43 must:

• Accurately complete the DG Review Assessment form (EEA7).

• Submit all necessary documents and records within the specified timeframe.

Employment Equity Compliance Certification (Section 53)

1. Employers must request an EE Compliance Certificate under Section 53 via the Department’s website.

2. Designated employers may apply for certification after submitting their annual EE report.

3. Employers who are not designated must confirm compliance with:

• Chapter II of the Act

• The National Minimum Wage Act, 2018, using the EEA15 form.

4. In their EEA15 form, designated employers must state any justifiable reasons for failing to meet compliance targets under:

• Section 42(4), or

• Section 53 (for sectoral target non-compliance).

5. Acceptable grounds for non-compliance include:

• Limited recruitment or promotion opportunities.

• Insufficient qualified candidates from designated groups.

• Factors related to court rulings or CCMA awards.

• Business transfers, mergers, or acquisitions.

• Economic conditions affecting business operations.

6. The EE Compliance Certificate will be issued as follows:

• EEA16A for designated employers.

• EEA16B for non-designated employers.

7. The certificate remains valid for 12 months from the date of issue.

Withdrawal of Certification

1. A certificate may be withdrawn by:

• The Minister,

• A labour inspector under Section 63 of the Basic Conditions of Employment Act, or

• A Department official assigned under Section 56 of the Act.

2. Withdrawal may occur if:

• Misrepresentation or fraudulent/inaccurate information was used in the application.

• The employer no longer meets certification requirements.

3. A certificate issued in terms of section 53(2) may not be withdrawn unless –

(a) the employer has been given 14 days to make representations upon being served

with an EEA16C notice; and

(b) any representations by the employer have been considered.

4. Withdrawal notices are issued using the EEA16D form.

Employment Equity Planning Timeline to ensure compliance by 1 September 2025

May 2025: Stakeholder Training and Strategic Analysis

• Equip key decision-makers with Employment Equity (EE) knowledge.

• Assess workforce composition and compare Ministerial targets to identify gaps.

• Conduct a remuneration income differential analysis.

• Facilitate Leadership and Management training sessions on EE principles.

May – June 2025: Compliance Preparation and Enablement

• Train EE Committees on legislative amendments and administrative procedures.

• Conduct Harassment and Disability Awareness workshops.

• Distribute and collect EEA1 submission forms from employees.

• Procure a disability validation tool to ensure accurate reporting.

• Establish an EE system as a single source of truth for compliance management.

July – August 2025: Implementation Phase

• Conduct a Barriers and Harassment Risk Assessment survey.

• Compile and record findings in EEA12 and EEA13 templates.

• Engage EE Committees in discussions on identified barriers and validation of EEA12 & EEA13 data.

• Administer a barriers survey for comprehensive assessment.

September – October 2025:

Documentation and Compliance Finalisation

• Review and update HR and Labour Relations policies and procedures to align with EE goals.

• Ensure EEA1 forms and Persons with Disabilities records are processed correctly.

• Secure leadership approval for finalised EEA12 and EEA13 submissions.

• Complete system integration for EE tracking and compliance.

• Finalise Key Performance Areas (KPA) and Key Performance Indicators (KPI) for managers and leaders.

Statutory Reporting Obligations

• Capture and submit EEA2 and EEA4 reports along with required documentation via the DEL platform.

November 2025 – November 2030: EE Plan Execution and Monitoring

• Implement the Employment Equity Plan, ensuring consistent monitoring and evaluation.

• Utilise dashboard reporting to track progress.

• Apply the deviation protocol to address compliance variances and ensure alignment with strategic EE objectives.