Complying with the New Requirements of the Employment Equity Act
Key Highlights :
The Employment Equity Act has recently been amended, imposing stricter penalties and regulations on designated employers with more than 50 employees. Companies who fail to comply with the Act could face fines of up to R2.7 million or 2-10% of their annual turnover. To ensure compliance, management must up their game and take the necessary steps to understand the new requirements of the Act.
Gavin Stone explains what companies need to do to meet the new requirements of the Employment Equity Act. The amendment Bill signed into law last month requires all designated employers to submit an annual company employment equity report and plan to the Department of Employment and Labour. The plan must include how they will achieve equity targets against sectoral targets over a proposed five-year period.
To do this, employers must produce accurate long-term business forecasts incorporating business growth, headcount, projected labour turnover and employment equity goals. This will require a lot of work and analysis of business information to ensure the company’s strategy aligns with employment equity goals. Employers must also obtain the proposed sectoral targets for their company’s particular industry and do a gap analysis across the various management levels of their companies.
It is also crucial that employers have a good payroll system and database to meet the requirements of the Act. This system should include information on race, gender, occupational profile, engagements, terminations, promotions, training and salary. This information is essential when compiling a workplace profile and reporting on year-end employment equity statistics.
The Act also requires employers to do an analysis of the company’s employment policies, practices, procedures and working environment to identify barriers that adversely affect designated groups. This analysis of affirmative action barriers is the starting point when preparing a new employment equity plan.
In addition, companies that intend to do business with state-owned entities must obtain a Section 53 certificate of compliance with the Employment Equity Act. If the employer does not meet the targets, they may raise reasonable grounds to justify failure to comply, providing an EEA15 form as evidence.
To help employers meet the requirements of the Act, the regulations published in 2018, together with other codes of good practice, and the new amendments, are designed to assist with the administration of the Employment Equity Act. It is important to note that the definition of disabilities has changed to a wider definition that includes "sensory impairment".
Implementing the Act successfully will require a team effort from employers, employees, trade unions and shop stewards. Employers will need to move quickly to make it happen and they would do well to seek professional assistance. Doing so will help companies avoid costly fines from the state.
