In the month of April, President Cyril Ramaphosa signed into law the Employment Equity Amendment Bill of 2020, which amended the Employment Equity Act 55 of 1998.
While the industry has been buzzing with many questions and very few answers, the revised Employment Equity Act Sectoral Targets were released on 12 May 2023 and are currently open for public comment for 30 days.
What does this mean for you?
While a lot of grey areas are still to be addressed, it is important to remember that the Employment Equity Act (EEA) and the Broad-Based Black Economic Empowerment Act (B-BBEE) are not the same legislation. During your annual B-BBEE Verification, the rating agent will assess your EEA submissions and changes to the Employment Equity Act should thus not be ignored.
However, changes to the Employment Equity Act do not automatically amend the Broad-Based Black Economic Empowerment Act. These two sets of legislation share a similar objective of transformation, but the requirements of each are different.
What does this mean for BBBEE?
A major change within the Employment Equity Amendment Bill is the change in the definition of a designated employer. The law now requires employers with more than 50 employees to submit employment equity plans for their companies, regardless of its revenue/turnover threshold.
This change in the EEA does not change the requirements of who is to comply with B-BBEE. If you are required to obtain a B-BBEE certificate, the amendments in the EE Act do not change this requirement.
Another key amendment to the EE Act, is the Minister of Employment and Labour now being able to set employment-equity targets for economic sectors. These targets are to be set as regional targets and were released for public comment on 12 May 2023.
Similarly, provincial targets exist within the B-BBEE legislation. This requires businesses to employ within the racial demographics of its province, should they want to score optimal points for the Management Control element.
The question raised is, which legislation will take priority when employing staff? The EE Act will have its set of requirements and targets to be met, as will the B-BBEE Act. Which set should a business comply with?
The answer to this question is not yet clear.
As a way to minimise the potential risk of non-compliance, CMS conducts a consistency check on the differences between the proposed targets of Employment Equity and the existing targets of Management Control as an element of the Broad-Based Black Economic Empowerment Act for our clients. Thus far, we have found the differences to be minuscule, albeit different.
However, as the targets are currently open for public comment, changes may occur that would require a reassessment of these findings.
You can contact CMS to conduct such a check on your B-BBEE Management Control score to minimise any potential future risk at info@consultr.co.za
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