Are you considered a designated employer in terms of the Employment Equity Act?

The Employment Equity reporting window is coming up with the deadline for submissions being 15 January 2022. As a designated employer, failure to comply could lead to substantial penalties.

A company is considered a designated employer if they employ 50 or more employees or if they exceed the annual turnover threshold in terms of schedule 4 the Act.

Below are the thresholds per industry:

The Act further places an obligation on a designated employer to comply with the following:

  • Appoint a senior manager as the employment equity manager.
  • Establish an employment equity committee and meet at least once quarterly.
  • Conduct an analysis on company procedures, policies, and the employee profile.
  • Identify barriers in terms of employment equity.
  • Assign affirmative action measures to the barriers identified as well as time frames to overcome these barriers.
  • Identify goals and targets in terms of employment equity.
  • Develop and monitor a 3-year employment equity plan.
  • Draft and submit employment equity reports annually.
  • Build and maintain an employment equity file.

Any designated employer that is found to be non-compliant with their obligations in terms of the Employment Equity Act could be liable to a fine by the Department of Labour, enforced by the Labour Court. Once a company is found in contravention of the Employment Equity Act, they will be referred to the Labour Court by the Department of Labour and fines imposed are:

  • No previous contravention – the greater of R1.5M or 2% of annual turnover.
  • One previous contravention – the greater of 1.8M or 4% of annual turnover.
  • A previous contravention within the previous 12 months or 2 previous contraventions within 3 years – the greater of R2.1M or 6% of annual turnover.
  • Three previous contraventions within 3 years – the greater of 2.4M or 8% of annual turnover.
  • Four previous contraventions within 3 years – the greater of R2.7M or 10% of annual turnover.

As can be seen from the regulations set out in the Employment Equity Act, a designated employer will not simply be fined and left to continue with business as usual. The Act clearly provides the Department of Employment and Labour with the mandate to continuously audit and refer a designated employer to the Labour Court until they are satisfied with a designated employers compliance status.

Do not hesitate to contact Invictus on 0861 737 263 for assistance with Employment Equity as well as to mitigate risks that are associated with being a designated employer.