Small businesses employing fewer than 50 people are among the primary beneficiaries of the amended legislation
The Employment Equity (EE) Amendment Act is set to come into effect on January 1, 2025, Minister of Employment and Labour Nomakhosazana Meth announced this week.
President Cyril Ramaphosa signed the new amendments into law in April 2023. The reforms aim to simplify compliance for small businesses and empower the government to set sector-specific equity targets.
Labour union Cosatu welcomed the new law, saying it would foster equity and hold employers accountable.
Small businesses employing fewer than 50 people are among the primary beneficiaries of the amended legislation. Starting in the 2025 reporting cycle, these businesses will no longer need to comply with Chapter III of the Employment Equity Act of 1998, including the requirement to submit EE reports.
“We are excited by the latest developments that small businesses will no longer have to go around spending their money on consultancy fees to source legal assistance to develop EE plans and submission of EE Reports,” Meth said. “We hope that the new amendments to Employment Equity, will impact positively on job creation and the unemployment rate.”
The amended legislation introduces several measures aimed at advancing workplace transformation. In addition, the Act strengthens enforcement mechanisms, enabling labour inspectors to monitor compliance more effectively.
Cosatu said in a statement that the reforms would help address South Africa’s persistent inequalities and improve compliance with labour laws.
The labour union highlighted key provisions in the Act:
– Requiring employers to provide confirmation in their EE Annual Reports that they have paid all their workers at or above the National Minimum Wage.
– Expanding the definition of disabilities to include intellectual and sensory impairments, a long overdue correction.
– Empowering the Minister to set economic sectoral, sub-sectoral, regional, sub-regional and occupation specific targets; enabling more precise targets for sectors, occupations and regions that are notorious for their failures to reflect South Africa’s demographics.
– Allowing for regional variations, which is critical given the diversity of South Africa’s population found in different provinces, e.g. the demographics of the Western Cape differ vastly from Limpopo.
– Requiring employers to consult trade unions on employment equity targets, and thus helping to foster a more inclusive approach to meeting targets and supporting collective bargaining.
– Empowering labour inspectors to inspect and ensure compliance with the EE Act.
– Empowering the Minister to issue compliance certificates to employers in good standing with the EE Act and to require such certificates for companies applying for government contracts. This provision in particular is a welcome step forward requiring employers doing business with the state to be in compliance with labour laws and acting in a way that supports good labour practises. Workers’ hard-earned taxes should not be used to reward abusive employers.
Cosatu urged the Department of Employment and Labour to move with speed to ensure employers across all sectors comply with these long overdue provisions.
“Organised Business must do its part to ensure employers are aware of these new requirements. Cosatu will work with its Affiliates, endeavour to empower shop stewards and workers on this progressive Amendment Act,” it said.
Cosatu also warned against attempts to stoke racial divisions, emphasising that the Act does not threaten jobs, but rather aims to address systemic inequalities.
“Thirty years into democracy, over 62% of senior management posts are still held by White compatriots,” the union stated, saying this was a wake-up call for the need for continued transformation.
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