Assented to in April 2023, the Employment Equity Amendment Act (‘the Amendment Act’), which introduces the controversial concept of ‘sectoral targets’ for designated employers and those seeking to conduct business with government, came into operation on 1st January 2025.
Designed to enhance statutory compliance, minimise bureaucratic burdens on small businesses, and regulate sector-specific employment equity targets, the amendments to the Employment Equity Act (‘the Act’) have notable consequences for larger employers, in particular.
Crucially, the Amendment Act revises the definition of a ‘designated employer’ to mean an employer that employs no less than 50 employees, but excludes an organ of state, municipality, or employer characterised as a designated employee pursuant to a collective agreement. The practical implication of this is that businesses employing 49 or fewer employees are exempt from complying with the affirmative action requirements of the Act.
Significantly, the Amendment Act introduces numerical employment equity targets, which are specific to economic sectors. In essence, sectoral targets are intended to ensure that individuals from designated groups are equitably represented. Pursuant to the aims of the Amendment Act, the Minister of Employment and Labour is empowered to identify economic sectors in respect of which numerical targets will apply, consult with affected stakeholders, and proceed with establishing such targets.
Although the Minister has published two sets of draft Regulations for public comment, there is little certainty regarding the final form of these sector-specific numerical goals. Given this uncertainty, it is not yet necessary for employers to revise their employment equity plans. If and when the relevant sectoral targets are finalised, affected employers – designated employers and non-designated employers hoping to transact with the state – must re-evaluate their employment equity plans to ensure that their equity goals align with published targets.
Other amendments to the employment equity regime include an expanded definition of ‘disabilities’, which incorporates persons with sensory or intellectual impairments, the widening of labour inspectors’ powers to enforce compliance, clarification regarding employers’ obligations to consult with representative trade unions, and the delineation of certain criteria which employers must satisfy for compliance certification.
For expert legal guidance in employment law matters, contact our labour law specialists at labour@stbb.co.za.
