Employment Equity Act Amendments

The Employment Equity Act Amendments came into effect as of 1 August 2014, and make provision for such things as annual reporting for all designated employers; a much greater level of detail in Employment Equity Plans and in the EE Reports; and employers’ obligation to investigate and reduce income differentials – to name but a few of the 26 key changes.

The penalties for non-compliance have also increased, and you’ll now face a fine of up to R2,7 million or 10% of your turnover if you don’t have a good Employment Equity plan and strategy. Here is an explanation of the key changes:

1. The Definition of “Discrimination” has expanded: The grounds for discrimination are no longer limited to race, gender, sex, pregnancy, etc (as listed in Section 6 of the Act), but will also include discrimination “on any other arbitrary ground”. This change brings the EEA in line with the terminology used in section 187(1)(f) of the Labour Relations Act, 1995 (Act No. 66 of 1995), that prohibits discriminatory dismissals.

2. Psychometric Testing: Previously, psychological tests could be used on employees and applicants, as long as they were proved to be scientifically valid and reliable, could be applied fairly to all employees and were not biased against any employee or group. The amendments now include an additional requirement that only psychometric tests that have been certified by the Health Professions Council of South Africa, or another body which is authorised to certify such tests, may be used.

3. The Definition of ‘Designated groups’ will only apply to victims of Apartheid: Now, the definition of “Designated Groups” applies only to people who were citizens of South Africa before 1994, or their descendants, or people who would have been entitled to citizenship if not for the policies of apartheid. This means that employing foreign nationals or people who became S.A. citizens after April 1994 will not help employers to meet their affirmative action targets.

4. Equal pay for Work of Equal value: A new section has been included into the EE Act, to deal specifically the problem of different people earning different salaries for doing the same job. If an employer pays different benefits or wages to people from different groups, (eg. gender, race, disability etc), they would have to prove that the differentiation was based on fair criteria such as experience, skills, levels of responsibility etc. If there are income differentials, employers will need to show how they have fair and clear methodologies for determining pay, to prove that work is given the same rate of pay regardless of who the employee is.

5. Burden of Proof: If an employee claims that he/she has been unfairly discriminated against (on the basis of race, gender, disability etc), the onus will be on the employer to prove that discrimination did not take place, or that such discrimination was FAIR. However, in the case of an allegation of unfair discrimination “based on any other arbitrary ground” the onus will be on the employee.

Employment Equity Act 20146. Submission of Employment Equity Plans and Reports: All designated employers (see point 8 below), including those with 150 and less employees, must now submit their EE reports annually. Designated employers must submit employment annual equity plans and reports to the Department of Labour and will receive an Assessment of Compliance Report following a labour inspection. Designated employers that employ fewer than 150 employees must submit a first report to the director general within 12 months after the commencement of the Act or on the date on which the employer becomes a designated employer.

7. Threshold for ‘Designated Employers’: Designated Employers are companies who employ 50 or more staff, or those that have a total annual turnover above the threshold set out in the Employment Equity Act; this threshold is now increased, which means that some employers that were previously obliged to comply by virtue of their turnover will no longer have to do so.

8. Occupational Categories: In order to avoid confusion and simplify the procedures relating to affirmative action, reference to ‘occupational categories’ is now removed and only ‘occupational levels’ are reported on.

9. Enforcement Procedures: The process for enforcing compliance by a labour inspector has been shortened and made easier. For instance they can now issue a compliance order without first having to obtain a written undertaking from an employer, or before referring that employer to the Labour Court, for non-compliance such as failure to develop and implement an Employment Equity Plan or failure to submit an Employment Equity Report.

10. Labour Brokers: Employees who are placed with a client by a temporary employment service (labour broker) for longer than six months are now deemed to be employees of the client for the purposes of affirmative action.

11. Increased Fines: The maximum fines for contraventions of the Employment Equity Act have now greatly increased. Also an employer’s turnover could be taken into account in determining the maximum fine that may be imposed. Failure to comply with the Employment Equity Act will result in penalties ranging from R1.5 million (for no previous contravention) up to R2.7 million or 10% of the company’s annual turnover – whichever is greater (for successive contraventions).

Make sure you understand the provisions of the Employment Equity Act… call us at 021-7014883 if you’d like help! Or book one of our training courses:  Employment Equity Training

Employment Equity ActFor more information on the Employment Equity Act as well as the Code of Good Practice issued by the Department of Labour, follow this link: Dept of Labour Website

Employment Equity DVDIf you need to educate your workforce on Employment Equity, follow this link:  Employment Equity DVD

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