Employment Equity- The Basics.

What is employment equity?

The employment equity act No.55 of 1998 ensures a fair and diverse workforce among designated employers.

Designated employers and groups.

A designated employer is either an entity with a headcount of 50 or more employees, or an entity that has fewer than 50 employees with an annual turnover that is equal to or above the turnover thresholds as stated in schedule 40 of the Act.

Turnover is counted as annual turnover of the entity and the profits are not counted.

A designated group in terms of the act is defined as Africans, Coloureds, Indians, Women and People with Disabilities.

What are the requirements of a designated employer?

1. Apply and implement affirmative action measures for people from designated groups.
2. Establish an employment equity representative committee.
3. Conduct a barrier analysis.
4. Develop an employment equity plan based off the barrier analysis addressing identified barriers.
5. Submission of an annual report on the progress as stated in the plan, and submission of the employment equity report.

What the statistics say.

Statistics as issued by the Department of Labour in 2019 state that “of 177209 inspections conducted in 2019, 41709 designated employers have been found to be non-compliant.”

The consequences of non-compliance.

Designated employers found to be non-compliant are subject to fines estimated to be 10% of an entities annual turnover or R1.5 million.

Non-compliance could also mean incorrect use and untimely submission of the plan and report to the Department of Labour. Compliance includes making visible progress as outlined by the plan, thereby shifting from merely putting together a tick-box plan to impress, with clear strategies to carry out points stipulated on the plan.

Solutions for compliance to Employment Equity.

Having a trained consultant help you with your committee setup, EE plan and report could help entities avoid costly fines for non-compliance.

Get in touch with us here for a consultation session on your needs. We offer cost-effective, sustainable solutions to compliance with B-BBEE, EEA and SDA related legislation.