The Employment Equity Amendment Bill, 2020 was signed into law on the 12th of April 2023. The Bill amends the Employment Equity Act 55 of 1998, which aims to promote equity and eradicate unfair discrimination in the workplace.
The amendment proposes several changes to the existing legislation, which will have a significant impact on South African businesses.
The key amendments which will have a significant impact on South African business include the following:
1) REMUNERATION: In the area of remuneration, the law requires employers to be transparent about their remuneration practices, to ensure that all employees are paid fairly and that discrimination practices are eliminated. The amendment includes a provision requiring businesses to report on the remuneration and benefits of employees based on race, gender, and occupation.
2) EQUITY PLANS: The amendment aims to increase representation of designated groups in senior positions and to close the skills gap. To achieve this, companies with more than 50 employees need to submit employment equity plans spelling out how they will achieve targets and develop plans to improve representation of designated groups in senior positions.
3) DESIGNATED EMPLOYER: This designated employer definition has now changed so that employers that employ fewer than 50 employees, irrespective of their annual turnover, will no longer form part of the designated employer definition and, therefore, will be exempt from compliance.
4) TARGETS: Notices will be issued by the Minister setting different numerical targets for different occupational levels, sub-sectors or regions within a sector or on the basis of any other relevant factor.
5) VOLUNTARY COMPLIANCE: Section 14 with regards to Voluntary Compliance has been repealed. An employer who is not a designated employer previously could notify the Director General that they wish to comply as if they were a designated employer – this section has been repealed and therefore ALL employers who are not designated employers are exempt.
6) BUSINESS WITH THE STATE: Companies seeking to do business with the state will be required to submit a Certificate from the Department confirming that they are in compliance with the Employment Equity Act and its objectives, and that they do not pay their employees less than the national minimum wage.
7) INSPECTION OF WORKPLACE: The law now compels labour inspectors to inspect workplaces and to issue employers with compliance orders.
8) DISABILITY DEFINTION: People with disabilities includes people who have a long-term or recurring physical, mental, intellectual, or sensory impairment which, in interaction with various barriers, may substantially limit their prospects of entry into, or advancement in, employment, and ‘persons with disabilities’ has a corresponding meaning.
9) PENALTIES: The Employment Equity Amendment Bill introduces tougher penalties for non-compliance and failure to report, including imprisonment of up to five years or fines up to 10% of annual turnover.
The Amendment Bill seeks to advance transformation of South Africa’s workforce by setting equity targets for economic sectors and geographical regions and requiring enterprises to develop transformation plans.
Impact of the Amendments on Broad-based Black Economic Empowerment (B-BBEE):
The Employment Equity Amendment Bill also seeks to strengthen affirmative action measures by introducing numerical targets for designated groups, such as black people, women, persons with disabilities, and youth. This is intended to accelerate progress towards achieving equality in the workplace and creating a diverse and representative workforce.
There has been some concern about the impact of the Employment Equity Amendment Bill on B-BBEE. However, it is important to note that the two policies are not mutually exclusive and can in fact complement each other as the Employment Equity Act focuses specifically on advancing employment equity, which is also a critical part of the B-BBEE Scorecard and addressing discrimination in the workplace.
The Employment Equity Amendment Bill is a welcome development in the ongoing efforts to promote employment equity and address systemic inequality in South Africa.
Overall, the Employment Equity Amendment Bill 2020, is a positive step towards promoting equity and fairness in the workplace. However, some businesses may see the proposed changes as an additional burden, particularly as they are required to report on remunerations and benefits. Furthermore, the amendments may be challenging for smaller businesses, which may not have the recourses to develop comprehensive plans and set meaningful targets.
In conclusion, the Employment Equity Amendment Bill 2020 is a critical piece of legislation that aims to promote equity, fairness and inclusivity in the workplace. While the proposed changes may be challenging for businesses, they are essential to ensure that all employees are treated fairly and that discrimination practices are eradicated.
Ultimately, businesses that embrace the changes are likely to benefit from a more diverse and inclusive workforce, which can lead to increased productivity and profitability.
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