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South Africa’s tough new transformation regulations have undergone a significant adjustment that firms need to be aware of.

The Employment Equity Amendment Bill just underwent significant changes that will allow smaller firms much-needed breathing room. The bill is currently waiting for president Cyril Ramaphosa’s approval.

A revision in the definition of “designated employer” will benefit smaller employers, claim Werksmans Attorneys’ Gillian Lumb and Nadeem Mahomed. Regardless of their yearly turnover, firms with fewer than 50 employees will be excluded from the criteria.

Smaller businesses will no longer be required to adhere to the duties of a designated employer with regard to affirmative action, such as creating and implementing employment equity plans, reporting to and submitting employment equality reports to the Department of Employment and Labour.

According to the company, this will greatly lessen the administrative load on these firms.

On May 17, 2022, the Employment Equity Amendment Bill, 2020 was approved by the National Assembly and National Council of Provinces. President Cyril Ramaphosa must now ratify it and sign it into law.

On September 1, 2023, the newly revised Employment Equity (EE) Act will go into effect with the intention of assisting South Africa’s workplace change.

The changes will provide the employment and labor minister more authority to control EE targets for particular industries as well as compliance standards for issuing EE Compliance Certificates in accordance with Section 53 of the Act.

Smaller businesses will still be able to acquire a certificate of compliance under section 53 of the EEA, Werksmans said, even though they won’t be required to create and submit employment equity reports due to the revision that would result in the repeal of section 14 of the EEA.

The measure will soon be signed by the president, according to Thembinkosi Mkalipi, acting deputy director-general of Labour Policy and Industrial Relations.

He expressed concern that even companies who may not deal with the state directly would still need to abide by the rules.

With the exception of the South African National Defence Force, National Intelligence Agency, and South African Secret Services, all employees and employers are covered by the EEA after accounting for the small business amendments.

Mkalipi stated that the department would provide the list of sector targets for public discussion in due course.

The effect for employers is that they will need to review their targets if they already have an EE plan in place because it will be impacted by the targets that are set.

Mkalipi claims that the establishment of EE objectives involved consultation with 18 different industries.

With a goal deadline of the end of September, the following industries have either been consulted or are currently being consulted:

  • Water supply
  • Sewer management, and remediation, along with lodging and culinary services, are all important.
  • Social work and human health
  • Fisheries, forestry, and agriculture
  • Retail and wholesale trade;
  • Automobile and motorcycle repair;
  • Administration and assistance;
  • Technological, scientific, and professional
  • Supply of electricity, gas, steam, and a/c; financial and insurance businesses.
  • Manufacturing, information and communication, public administration, manufacturing, real estate, and mining and quarrying.