Employment Equity Update - Upcoming Changes You Need to Know About
The Department of Employment and Labour (DoEL) held a virtual meeting on 17 February 2025 with key stakeholders to discuss the implementation of Employment Equity (EE) sector targets, particularly in the Professional, Scientific, and Technical sectors. This follows the introduction of the Employment Equity Amendment Act 4 of 2022 (EEAA), which was enacted on 1 January 2025, and the Draft Regulations on Proposed Sectoral Numerical Targets proposed on 1 February 2024.
The DoEL provided clarity on several vital aspects that designated employers must understand to ensure compliance:
Compliance Certificate Requirements
Employers must meet specific EE criteria to qualify for a compliance certificate under section 53 of the Employment Equity Act. Without this certificate, businesses may face restrictions when applying for government contracts.
Justifiable Grounds for Non-Compliance
The DoEL outlined potential reasons that could be accepted if an employer fails to meet EE targets. While these reasons are not yet finalised, they could include factors such as:
Skills shortages in a particular sector or economic downturns affecting hiring practices, i.e. suitably qualified candidates were not available in a particular occupational category or region
Some industries, such as male-dominated sectors like mining, may struggle to meet gender-based EE targets. If an employer can prove efforts to recruit or upskill underrepresented groups but still falls short, this could be an accepted justification.
No recruitment or promotion opportunities – If an employer had no vacancies or promotions available during the reporting period, they may justify the inability to meet EE targets.
NOTE: Employers must provide verification documents for any justification and these documents maybe subjected to audit.
Economic Active Population (EAP) vs EE Targets
The meeting highlighted the national EAP and its breakdown per province, comparing these figures to the proposed sectoral EE targets. Employers will need to align their workforce composition with these targets where possible.
Next Steps in Implementation
By the end of February 2025, the DoEL expects to finalise consultations with stakeholders regarding sector-specific EE targets. Following this, two key sets of regulations is planned to be published by March 2025:
General Administrative Regulations – Covering employment equity reporting forms, compliance tools, and templates for employment equity plans and certificates.
Regulations on 5-Year Sector Targets – Establishing employment equity targets for various industries over the next five years.
Internal Training for Labour Inspectors
In April 2025, DoEL inspectors will undergo training to assess employers’ compliance with the new EE regulations.
What This Means for Accountants and Business Owners
With the EEAA now in effect, designated employers must stay informed on compliance requirements. Failure to meet sectoral targets could result in financial penalties or losing eligibility for government-related work. While the final regulations are still pending, businesses should:
Review their current workforce demographics concerning sector targets.
Identify potential risks for non-compliance and determine whether they may qualify for justifiable exemptions.
Prepare for the upcoming reporting and certification process.
Monitor DoEL updates to stay ahead of changes.
Stay tuned for more updates as the final EE regulations are released in the coming months.
