Employment Equity Act amendments

On 1 January 2025, the Employment Equity Amendment Act came into effect and brought significant changes to the South African labour law landscape. The amendments aim to strengthen the implementation of affirmative action, broaden the focus on racial equity, and promote economic transformation.

Of significance, the amendments reduce the regulatory burden for small employers and allow them to focus on job creation. Here are some of the key changes that businesses should be aware of to ensure compliance:

Definition of “designated employer”

• The definition now excludes employers who employ less than 50 employees, irrespective of annual turnover.

Definition of “people with disabilities”

• In line with the United Nations Convention on the Rights of Persons with Disabilities, 2007, “people with disabilities” is defined as “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”.

Sectoral numerical targets

• The Minister of Employment and Labour is now empowered to set specific equity targets for different sectors to promote the inclusion of historically disadvantaged groups across race, gender, and disability categories.
• The purpose of this is to ensure that employment equity is tailored to sector-specific needs and challenges.
• In circumstances where an employer operates in more than one sector, the employer must use the sectoral numerical targets of the economic sector where the majority of its employees are employed and render their services.

The impact of sectoral numerical targets on employers’ employment equity plans

• A designated employer will be required to set numerical targets in line with the sectoral targets in its employment equity plan.
• The effect of this is that employers will be assessed against the annual targets to achieve the set five-year sectoral numerical targets. The reasoning behind this is to provide an extra level of accountability.

Consultation with trade unions

• The amendment clarifies the consultation process between a designated employer and its employees. This means if there is a representative trade union, the designated employer must consult with the trade union, not directly with the employee.

Compliance orders

• The Minister is empowered to make regulations regarding the manner of compliance orders in respect of affirmative action.

Increased penalties for non-compliance

• Employers who do not comply may face higher penalties, including fines and potential restrictions on doing business with government entities.
• Non-compliance with set targets will result in penalties, such as fines and potential restrictions on operating with government contracts.

For more information and advice, contact Riona Kalua, Head of our Labour and Employment Team.