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Ramaphosa enacts significant new BEE and transformation regulations for South Africa

Reference: Published by Staff Writer, 12 April 2023


The Employment Equity Bill has been signed into law by President Cyril Ramaphosa.

During a conference on Wednesday, presidential spokesperson Vincent Magwenya mentioned the bill’s signing (12 April).

On May 17, 2022, the National Assembly and National Council of Provinces enacted the Employment Equity Amendment Law, 2020.

According to Magwenya, the new legislation would advance diversity and equality at work and give the government the authority to establish precise equity goals by industry and region, where transformation attempts have lagged.

Companies with more than 50 employees are required by law to submit employment equality plans outlining how they will reach these goals, as well as yearly reports, to the Department of Employment and Labour.

Businesses who want to work with the state must submit a certificate from the Department stating that they adhere to the Employment Equality Act’s goals and that they do not pay their employees less than the federal minimum wage.

The law now forces labor inspectors to inspect workplaces and issue businesses with compliance orders as part of making sure the employment fairness objectives are realized. The Department of Employment and Labour has pledged to increasing the number of inspectors who would enforce compliance, including inspectors for health and safety and labor.

How to prepare

The revisions’ primary goals are to provide the Employment and Labour Minister more authority over sector-specific Employment Equality (EE) targets and compliance standards for issuing 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.

Determining which companies are considered “designated employers”—those that are required to submit things like EE reports—is important because it is these firms that the rules specifically target.

A “designated employer” under the prior law, depending on the industry, was defined as an employer with 50 or more employees or an employer with less than 50 employees but an annual turnover that was equivalent to or greater than the level established by the EE Act.

Employers with less than 50 employees, regardless of their yearly turnover, will no longer be included in the designated employer definition and will consequently be excused from compliance, per a revision made to the designated employer definition.

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 is quite a major 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, the acting deputy director-general of Labour Policy and Industrial Relations, earlier mentioned that a new EE online assessment system would be developed to track the accomplishment of sector targets, and the assessment would be carried out once a year.