Prepare For Your Annual Employment Equity Assessment

Prepare For Your Annual Employment Equity Assessment

SHARE

The deadline for Employment Equity Returns has lapsed as of 1 October and there are still employers who don’t have the facts when it comes to completing their EEA2 returns, says Keith Levenstein, CEO of EconoBEE . As a legislative requirement and BEE imperative, it’s vital that employers are thoroughly informed of the Employment Equity return processes, requirements and exemptions for businesses of varying sizes.

“Many businesses are still unaware of what an EEA2 return is and its relation to black economic empowerment,” says Levenstein.  “In short, this form needs to be submitted to the Department of Labour by designated employers as set out by the Employment Equity Act. It’s important to note that depending on the size of your company there are certain sections of the EEA2 return that should be completed and others that should not.”

Employment Equity Returns Requirements

Small employers (those with more than 50 employees but less that 150) are exempt from completing certain sections of the EEA2 return. On the other hand, large employers (those that employ more than 150 people) have to complete the entire form.  Furthermore, these large employers need to submit their first form within six months of being designated and from then on must submit a return annually on the first working day of October.  Small employers have twelve months to submit after designation and thereafter should submit their return on the first working day of October of every year ending with an even number.

“With regards to black economic empowerment, the EEA2 form is submitted as proof of the company’s compliance with the Employment Equity Act (unless you are exempt from doing so).  During verification of a company’s BEE scorecard, verification agents require the EEA2 form as supporting documentation when considering the Employment Equity and Management Control elements,” advises Levenstein.  “We find that verification agencies do not operate uniformly with some saying you lose all of your points if you do not submit an EEA2, therefore it is best to just submit the form.”

What constitutes a designated employer?

Companies that employ 50 people or more or their annual turnover threshold is equal to or more than the amounts below:

Annual Employment Equity Assessment Designated Employer - Annual Turnover

What information is required in the EEA2?

The employer’s details are required along with a workforce profile which includes:

  • Occupational categories (total number of employees including those with disabilities)
  • Occupational levels (top management, senior management, middle management, junior management, semi-skilled and unskilled employees)
  • Core operational functions which are positions that are related to the heart of the business and could lead to profit (e.g. sales department) and support functions (e.g. accounts department).
  • Further to this data on workforce movement relating to recruitment, promotions (employees that were promoted in each of the occupational levels) and termination should be stipulated; clearly indicating where this is applicable to persons with disabilities.
  • Large employers also need to provide information relating to all disciplinary actions that took place within the 12 months prior to the report.
  • Skills development and training information specifying the total number of employees within the company who underwent training, including those with disabilities should be provided.
  • A qualitative assessment (only applicable to larger employers) and, as of the second round of submission, a progress report are also required.
  • Regular consultation with the Department of Labour is advised in order to get a precise idea of the requirements.
Entrepreneur
Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.