HR executives say the employment equity bill marks a pivotal step in South Africa’s journey toward a more equitable and inclusive workplace.
The Employment Equity Amendment Act, 2022, which came into effect on 1 January 2025, is a welcome and long overdue development, say leading HR executives.
The amendment is a further attempt by the government to advance transformation of the local workforce by setting new measures to promote diversity and equality in the workplace.
The Act amended the definition of ‘designated employer’ to limit compliance with affirmative action obligations (e.g., preparing, implementing and reporting on implementation of an employment equity plan) to employers employing 50 or more persons. It also excludes employers who employ fewer than 50 employees, irrespective of their annual turnover.
“Historically, including small businesses as ‘designated employers’ has placed significant administrative and financial burdens on entities with limited resources. The amendments alleviate these pressures by redefining ‘designated employers’ only to include those with 50 or more employees, allowing smaller companies to focus on growth and sustainability,” says seasoned HR executive Dr Mamello Masia, who is also a non-executive director for Standard Lesotho Bank.
Mamello says that South Africa’s workplaces have struggled with achieving equitable representation across sectors, so introducing sectoral numerical targets is a targeted approach to address this imbalance, ensuring that diversity is prioritised across all occupational levels. “Given that the transformation agenda differs from one sector to the other – some sectors are more or less transformed than others and cannot all be treated the same – we are still awaiting how such a target will be determined.”
But Mamello warns that while sectoral targets promote equity, they may lack flexibility, leading to unintended consequences for businesses operating in unique or constrained labour markets. Companies may face challenges meeting targets due to skill shortages within certain designated groups.
The certification process may be onerous, especially for businesses unfamiliar with the updated requirements, and clear guidelines and support from regulatory bodies will be essential to navigate this aspect effectively, she adds.
“Efforts to meet sectoral targets could, if not managed thoughtfully, inadvertently lead to reverse discrimination claims or the alienation of non-designated groups.”
The updated definition of people with disabilities to include those who have long-term or recurring physical, mental, intellectual or sensory impairments also ensures a broader and inclusive interpretation.
“This inclusive approach aligns with the definition outlined in the United Nations Convention on the Rights of Persons with Disabilities (2007), ensuring that no one is discriminated against,” says Nelly Mohale, head of human capital at Decusatio.
Nelly adds, however, that businesses can face several shortcomings, including non-compliance fines, which can lead to significant financial losses. Additionally, some companies may hesitate to expand their size to avoid becoming designated employers, ultimately hindering their growth.
To navigate these compliance requirements more effectively and with less stress, employers should stay updated on the latest trends and changes in legislation.
“There are two considerations that can be taken into account: firstly, I think it is important that we need a constructive environment between government and business. There has been some positive momentum generated through the formation of the Government of National Unity (GNU) and improved operating performance from Eskom. At the same time, we see a lot of debate around the NHI, this new proposed SME fund and of course the EE legislation. We need to make sure we don’t make it too hard or too high friction to do business in South Africa.”
She also believes businesses need to be incentivised to invest in their human capital, and that organisations should make long-term investments in young people. “A lot of the B-BBEE initiatives focus on short-term work experience with limited reward for absorbing employees into workforces. When organisations are thinking about graduate programmes, learnerships, internships or their Youth Employment Service (YES) initiatives, these shouldn’t just be viewed as short-term initiatives for compliance – but rather to build a pool of talent that will eventually allow for true transformation of the workforce,” she adds.
Overall, the amendments present an opportunity for South African businesses to lead the way in workplace transformation, Mamello believes. “While challenges and blind spots exist, proactive planning, robust strategies and a commitment to inclusivity can help organisations navigate these changes effectively. By addressing past inequities and embracing the spirit of the amendments, businesses can contribute meaningfully to building a fairer and more equitable society.”
