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What you should know about South Africa’s strict new transformation legislation that will take effect in 2023

As it gets ready for new transformation legislation to take effect in the nation this year, the Department of Employment and Labour has issued a warning to businesses about the impending deadline for employment equality reporting.

According to the agency, authorized firms must submit their annual Employment Equity (EE) reports for 2022 by midnight on January 15, 2023. Businesses could incur fines and other penalties if they don’t, according to the statement.

The Employment Equity Act of 1998 specifies that annual equity plans must be submitted.

According to the Employment Equity Act, employers are required to submit their EE reports, which must include the required data and be signed by the designated employer’s chief executive officer.

Through the elimination of unjustified discrimination, the implementation of affirmative action measures to address the disadvantages in employment experienced by designated groups, and ensuring their equitable representation in all occupational levels of the workforce, the Employment Equity Act promotes equal opportunity and fair treatment in the workplace.

The agency noted that the year in which the revised EE laws is anticipated to go into effect following the amended EE Bill’s passage is the same year in which the revised EE report plans are due.

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

September 2023 is the anticipated implementation date for the new laws.

The amendments’ primary goals are to provide the Employment and Labour Minister more authority over sector-specific EE targets and compliance standards so that she can issue EE Compliance Certificates in accordance with Section 53 of the EE Act.

This implies that organizations, particularly those who have business with the government, will need to be in good standing in terms of EE compliance.

The term “designated employer,” which refers to the companies that must file items like EE reports, is a critical component of the legislation revisions, according to legal experts, as it is these employers that the regulations specifically address.

According to the existing law, a “designated employer” is defined as either a company with 50 or more employees or an employer with fewer than 50 employees who, depending on the industry, has an annual turnover that is equal to or higher than the criteria established by the EE Act.

Since firms with less than 50 employees, regardless of their yearly turnover, are no longer included in the designated employer definition and are consequently free from compliance, the designated employer definition has changed under the modified bill.

The fact that these businesses will not be compelled to take action to guarantee that adequately qualified individuals from designated groups have equal employment opportunities and are represented at all occupational levels in the workplace marks a significant change.

The ability of the employment and labor minister to control sector-specific EE targets and compliance requirements, however, is the reform that will have the most impact on the large corporations that meet the description of a designated employer.

This indicates that the minister will have discretion over the EE targets for certain sectors. Although these goals are not yet known, designated employers must closely monitor the regulations the minister enacts since they will have a substantial practical impact on how they comply with the act.

Businesses must abide by the law even if they don’t necessarily do business with the government directly.

Thembinkosi Mkalipi, acting deputy director-general of Labour Policy and Industrial Relations, announced that a new EE online assessment system would be developed to track the accomplishment of sector targets. The assessment will be carried out once a year.