Stinging penalties and a bar on doing business with the state are in store for companies that fail to meet the new requirements of the Employment Equity Act.
Due to an amendment bill to the act, signed into law on April 12, all companies with more than 50 employees are now “designated employers” and the minister may propose targets for industry sectors. Companies that don’t comply risk fines of R1.5m-R2.7m, or 2%-10% of annual turnover.
A welcome change is the repeal of the turnover table, which used to require companies with fewer than 50 staff to report on and draft employment equity plans and reports. The law requires designated employers with more than 50 employees to submit an annual company employment equity report and plans to the department of employment & labour.
The plan must spell out how they will achieve equity targets measured against sectoral targets over a proposed five-year period. Employers will have to put targets to their headcount composition, in most industry sectors, based on sectoral goals. It’s now crucial for management to produce accurate long-term business forecasts incorporating business growth, a headcount, projected labour turnover and employment equity goals.
This will demand a lot of work. If you are in management you will need to make an accurate analysis of business information, ensuring your company’s strategy aligns with employment equity goals. Good record-keeping is key to this, and the first step is to obtain the proposed...
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