15 November 2021
“My company is relatively small with only 12 employees. That said, I’ve had to comply with employment equity requirements as we qualify as a designated employer because of our company turnover. I’ve heard there are proposed changes afoot for the employment equity environment and was wondering what this may mean for my business.”
There is most certainly amendments afoot in respect of employment equity. In 2020 a new Employment Equity Bill was introduced and which Bill has now progressed further towards finalisation. The Bill proposes a number of changes to the current employment equity legislation.
One such proposed amendment is a change to the definition of designated employer, which if passed will determine that a designated employer will now exclusively be an employer that has at least 50 employees or more and will no longer include an employer who is over a certain turnover threshold. The reason for this proposed amendment, according to the Bill, is to reduce the regulatory burden on small employers.
The Bill also proposes that the Minister of Employment and Labour be empowered to identify national economic sectors and to set numerical targets for the employment of certain designated groups for these sectors. Companies who wish to do business with organs of state will have to obtain a compliance certificate which will require that they meet the numerical targets set for them or have a reasonable reason for not meeting the targets. A compliance certificate will not be issued if the employer has not submitted its most recent employment equity report, was found to have breached the prohibition on unfair discrimination in terms of the Act or failed to pay the minimum wage within the last 3 years.
A further amendment that can be highlighted is the definition of people with disabilities as proposed by the Bill. The Bill intends to align the definition with the current definition contained in the UN Convention on the Rights of Persons with Disabilities, which is set to expand the current definition to include people who have a long-term or recurring physical, mental, intellectual or sensory impairment which, in interaction with various barriers, may substantially limit their prospects of entry into, or advancement in, employment. Businesses will need to take note of this new definition.
The proposed changes will assist smaller businesses like yours that previously only qualified as designated employers because of their turnover and absolve them from having to comply with the numerical targets to be set by the Minister of Employment and Labour. Larger employers qualifying as designated employers will however have to comply.
The proposed changes are due to become effective in March 2022 and it is advised that all businesses contact their labour advisors to prepare for the coming into force of these amendments.