RSM South Africa

Requirements for Employment Equity Reporting

Prior to 1994, South Africa was governed by apartheid regime, a system in which people were discriminated based on the colour of their skin, gender, disabilities, etc. As a result of apartheid, companies had unequal racial and gender representation of people in different levels of the organisations. Post 1994, as a way to redress the past inequalities, the national government implemented policies and regulations that employers have to adhere to when filling positions in their organisations. The Employment Equity Act 1998 (Act 55 of 1998); requires that Affirmative Action measures be put in place in an effort to transform organisations, eliminate unfair discrimination and to redress the disadvantages suffered by the designated groups due to the imbalances caused by the apartheid system. Broad Based Black Economic Empowerment (B-BBEE) is an intervention that stems from the need for Affirmative Action.

According to the Employment Equity Act, all designated employers are obliged to annually submit an Employment Equity report. A designated employer is an employer who employs 50 or more employees, or an employer who employs fewer than 50 employees, but has a total annual turnover that is equal to or above the threshold as listed below.

TURNOVER THRESHOLD APPLICABLE TO DESIGNATED EMPLOYERS

Sector Or Subsectors In Accordance With The Standard Industrial Classification

Total annual turnover

Agriculture
Mining and Quarrying
Manufacturing
Electricity, Gas and Water
Construction
Retail and Motor Trade and Repair Services
Wholesale Trade, Commercial Agents and Allied Services
Catering, Accommodation and other Trade
Transport, Storage and Communications
Finance and Business Services
Community, Special and Personal Services

R6,00 m
R22,50 m
R30,00 m
R30,00 m
R15,00 m
R45,00 m
R75,00 m
R15,00 m
R30,00 m
R30,00 m
R15,00 m

 

Designated employers are required to appoint an Employment Equity Manager. The appointed person should report directly to a Chief Executive Officer. Furthermore an Employment Equity Committee has to be nominated. The committee members have to be representative of all occupational levels, race and gender. All members of the Employment Equity committee have to attend training on the Employment Equity Act and made aware of their roles and responsibilities.

Designated employers that annually submit an Employment Equity report are required to have an Employment Equity Plan. The duration of the plan may not be shorter than a year or longer than 5 years. In order for the plan to be implemented the committee has to analyse and consult on the organisation’s workforce profiles, the employment practices and policies. The committee has to also identify barriers to Affirmative Action measures and come up with possible solutions to eliminate these barriers. The Employment Equity Plan is a future yearly plan which stipulates the number of designated employees that the employer aspires to have in the organisation in order to achieve its equity targets. When doing the Employment Equity Plan, the regional and national demographics of the economically active population have to be taken into consideration.

All designated employers are required to put all corrective measures in place in order to avoid having very large penalties imposed on them by the Department of Labour. Employers have to take note that the valid and timeous submission of Employment Equity reports are also a requirement under the Management Control element of the B-BBEE Scorecard.

Lebohang Tsholo

HR Generalist, Johannesburg


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