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ROCKSOLID CONSULTING

Employment Equity Services

Rocksolid Consulting can help your business comply with the Employment Equity Act and ensure that your workplace policies and practices are aligned to the Act. We also offer assistance with Employment Equity compliance, how to avoid penalties, and how to leverage your compliance steps towards strengthening your organisation.

Employment Equity is a prerequisite in measuring Management Control and/or Employment Equity. Entities with more than 50 employees and whose annual turnover is more than the prescribed threshold for that particular industry will need to comply. Every year, designated employers in South Africa are obligated to submit employment equity reports in accordance with Section 21 of the Employment Equity Act (EEA).

The purpose of the Act is to achieve equity in the workplace by promoting equal opportunity and fair treatment in employment through elimination of unfair discrimination and implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, in order to ensure equitable representation in all occupational categories and levels in the workforce. This includes their Employment Equity reports in relation to demographic profiles, gender representation and Employment Equity plans on how to address discrimination and inequity in the workplace.

Employment Equity has become an important element of B-BBEE that needs to be taken seriously, as the consequence of non-compliance is a steep financial penalty.

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Please engage with us should you need assistance with your Employment Equity reporting. We are here to help you every step of the way.

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Understanding Employment Equity

What Is The Purpose of Employment Equity?

The purpose of the Employment Equity Act no. 55 of 1998 is to achieve equality in the workplace by promoting equal opportunities and fair treatment in employment though elimination of unfair discrimination and implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups in order to ensure equitable representation in all occupational categories and levels in the workforce.

Who Must Comply With The Employment Equity Act?

An employer falls under this Act if they meet the definition of a “designated employer”. A designated employer is defined as:

an employer who employs 50 or more people, or
an employer who employs less than 50 people but has a total annual turnover that is equal to or above the applicable turnover of a business in terms of Schedule 4 of the Act, namely:

Designated employers must submit their report on a yearly basis between 1st October and 15 January. An employer that becomes a designated employer on or after the first working day of April but before the first working day of October must only submit its first report in the first working day of the October in the following year.

SECTOR	THRESHOLD
Agriculture	R6 million
Construction	R15 million
Catering, Accommodation and other Trade	R15 million
Community, Special and Personal Services	R15 million
Mining and Quarrying	R22,5 million
Manufacturing	R30 million
Electricity, Gas and Water	R30 million
Transport, Storage and Communications	R30 million
Finance and Business Services	R30 million
Retail, Motor Trade and Repair Services	R45 million
Wholesale Trade, Commercial Agents and Allied Services	R75 million

When Do I Need To Submit My Employment Equity Reports?

As a designated employer you will need to submit your EEA2 and EEA4 report either via manual submission in September or via the online system which opens on 1st October and will closes on 15th January.

How Do I Achieve Compliance With The Employment Equity Act?

There are other regulatory compliance requirements which should be satisfied once the reports are submitted such as developing an Employment Equity plan, setting up an Employment Equity Forum, minutes of meetings and register of these forum meeting, reviewing of workplace policies, processes and procedures to ensure that they are compliant with the legislative requirements. All documents will need to be kept on file. In addition, you will need to ensure that the designated employer has the Basic Conditions of Employment, Employment Equity Act (EEA3) and Health and Safety posters pinned up on the notice board.

What Are The Penalties For Non-Compliance?

A designated employer who does not comply with any of the regulatory requirements of the Employment Equity Act upon inspection by the Department of Employment and Labour Inspector could be fined between R1.5 million or 2% of annual turnover and up to R2.7 million or 10% of annual turnover, whichever the greater and depending on the severity of contravention.

The Department of Employment and Labour have increased the maximum permissible fines for non-compliance as indicated below:

Contravention	Contravention of any provision of Section 16, 17, 19, 22, 24, 25, 26 and 43(2)	Contravention of any provision of Section 20, 21, 23 and 44 (b)
No previous contravention	[R500 000] R 1 500 000	The greater of R 1 500 000 or 2% of turnover
A previous contravention in respect of the same provision	[R600 000] R 1 800 000	The greater of R 1 800 000 or 4% of turnover
Previous contravention within the previous 12 months or two previous contravention in respect of the same provision within three years	[R700 000] R 2 100 000	The greater of R 2 100 000 or 6% of turnover
Three previous contraventions in respect of the same provision within three years	[R800 000] R 2 400 000	The greater of R 2 400 000 or 8% of turnover
Four previous contravention in respect of the same provision within three years	[R900 000] R 2 700 000	The greater of R 2 700 000 or 10% of turnover

What Are The Employment Equity Amendments?

Designated Employers will have to utilise the Revised Income Differentials EEA4 form for their reporting on remuneration.

The objective of the EEA4 form is to collect information for the assessment of the remuneration gap between the highest-paid and lowest-paid employees, and at the same time assess inequalities in remuneration in relation to race and gender in the various occupational levels.