Legislative Background
On 14 April 2023, President Cyril Ramaphosa signed into law the Employment Equity Amendment Act 4 of 2022. This statute amends the long-standing Employment Equity Act 55 of 1998 (EEA) and formally comes into effect on 1 January 2025. Shortly thereafter, on 15 April 2025, the Minister of Employment and Labour withdrew the 2014 regulations and replaced them with the Employment Equity Regulations, 2025 (2025 Regulations). Acting under sections 15A(1) and (2) of the EEA, the Minister also gazetted a notice identifying national economic sectors and fixing sector-specific numerical targets. These regulatory changes form the backbone of South Africa’s new equity compliance framework.
The Purpose of the EEA
The EEA was originally enacted to counter the enduring effects of apartheid-era exclusion. Its central aim is to guarantee fairness in the workplace by promoting equality, banning unfair discrimination, and implementing affirmative action where necessary. It applies broadly to South African employers and employees, save for certain state security agencies. Importantly, the 2023 amendments narrowed the category of “designated employer” so that businesses with fewer than 50 staff members, regardless of turnover, are no longer compelled to fulfil designated employer obligations such as drafting employment equity plans or submitting annual reports.
Key Changes Introduced
1. Smaller Employers
The revised definition of “designated employer” lightens the administrative load on small businesses. These employers are freed from developing equity plans or reporting duties, yet may still apply for certificates of compliance under section 53 of the EEA, provided they meet basic non-discrimination and minimum wage standards.
2. Disability Definition
The description of “people with disabilities” has been updated to align with the UN Convention on the Rights of Persons with Disabilities (2007). This broader definition now explicitly includes individuals with long-term or recurring physical, mental, intellectual, or sensory impairments that hinder participation in employment when combined with societal barriers.
3. Psychological Testing
The requirement that all psychological assessments be certified by the Health Professions Council of South Africa has been scrapped. This change acknowledges both the limitations of the Council in handling such approvals and the evolving view that flexibility is needed in workplace assessments.
4. Sectoral Numerical Targets
A significant innovation is the introduction of sectoral numerical targets under section 15A. These targets ensure that historically disadvantaged groups, including black South Africans, women, and persons with disabilities are adequately represented across occupational levels. The Minister, following consultation and public comment, has now finalised sectoral targets for 18 economic sectors, ranging from mining and agriculture to finance and information technology.
Implementation Timelines
- 1 January 2025: Amendments become effective.
- 15 April 2025: Sectoral targets take effect.
- By 31 August 2025: Employers must finalise new equity plans or amend existing ones.
- 1 September 2025 – 15 January 2026: First reporting period under the amended framework. Certificates of compliance will be issued, though employers will not yet be assessed against the five-year targets.
- From 2026 onwards: Compliance evaluations against the sectoral numerical targets commence.
Compliance and Enforcement
Designated employers must align their equity plans with the Minister’s targets, setting annual benchmarks to close representation gaps. While the law distinguishes flexible “targets” from rigid “quotas,” employers who fail to justify non-compliance risk penalties. Schedule 1 of the EEA sets fines on a sliding scale, starting at the greater of ZAR 1.5 million or 2% of turnover, escalating to ZAR 2.7 million or 10% of turnover for repeat breaches.
Employers also require certificates of compliance to qualify for state contracts. These certificates, valid for 12 months, may be withdrawn if obtained fraudulently or if conditions for issuance lapse.
Broader Implications
The amendments bring South African employment equity law in line with international standards while sharpening regulatory teeth. By recognising electronic reporting, clarifying obligations toward trade unions, and empowering inspectors and the Labour Court, the framework ensures both flexibility and accountability.
Businesses operating across multiple provinces must carefully consider whether national or provincial demographics apply to their plans, while multinational firms must adapt to sector-specific representation goals.
Conclusion
The 2023 amendments and 2025 regulations mark a decisive shift in South Africa’s approach to workplace equity. Employers must now navigate stricter sector-based obligations, enhanced definitions of discrimination, and more robust enforcement mechanisms. For designated employers in particular, the focus is no longer on voluntary compliance but on measurable transformation across industries.
