Understanding Employment Equity

Understanding Employment Equity


Although the Employment Equity Act (EEA) was introduced in 1998, there are new businesses that find they needing to comply with EE provisions every day. And even though it shouldn’t be, we find that the concepts of ‘affirmative action’, ‘employment equity’ and ‘annual reporting’ are still rather daunting for many business owners – but you don’t need to be fearful and confused, because complying with the EEA is a lot easier than you may think.

The background of employment equity

Worldwide, men used to be considered the main breadwinners, thus relegating their economically active female counterparts to jobs and careers that paid inferior salaries and provided limited opportunities. South Africa was no exception to this phenomenon – except here, we had further inequalities and lack of opportunities based on race as well. Therefore, the EEA was introduced to change that landscape.

Complying with the EEA

Effectively, only companies that employ 50 or more people are required to comply with the Act. In reality though, your turnover within your industry may place you in a category where you are also required to comply, so it’s really best that you voluntary comply from the outset and avoid any stress down the road. The Act applies to you if your turnover is more than that set down in Schedule 4 of the Act (the figures vary according to the type of industry).


Sector or subsectors in accordance with the Standard Industrial Classification Total annual turnover
Mining and Quarrying
Electricity, Gas and Water
Retail and Motor Trade and Repair Services
Wholesale Trade, Commercial Agents and Allied Services
Catering, Accommodation and other Trade
Transport, Storage and Communications
Finance and Business Services
Community, Special and Personal Services
R2,00 m
R7,50 m
R10,00 m
R10,00 m
R5,00 m
R15,00 m
R25,00 m
R5,00 m
R10,00 m
R10,00 m
R5,00 m

Affirmative Action vs Employment Equity

Affirmative Action is meant to be a short-term labour policy that makes provision for preferential treatment for people who have historically been marginalised in the workplace and have not enjoyed equal access to employment and promotion opportunities.

Employment Equity on the other hand, is a long-term labour policy that aims to ensure true diversity within the workplace, across all organisational levels and in all occupations.

So, in short, AA tries to correct the workplace inequalities of the past, whereas EE tries to ensure that the situation never repeats itself and that all South Africans, regardless of race, gender or physical or mental ability, have equal access to employment opportunities and to advancement within the workplace.

Five steps to workplace diversity

Here are five easy steps that you can apply in your business, to ensure that you are complying with the principles of the EEA, even if you are not legally required to submit annual (150 or more employees) or bi-annual  (50 to 150 employees) reports to the Department of Labour.

1. Analyse your workforce

In order to identify the demographic (race and gender) profile within your business, you can conduct a simple exercise whereby all your employees complete an EEA01 form (available free from the www.labour.gov.za) confirming their gender and their race for your records. All you need to do is collate the information and identify your overall demographics, as well as the breakdown of genders and races at each occupational level (from junior to most senior management).

By performing this exercise, you will soon see where you have ‘under-representation’ of racial groups or of specific genders or people with disabilities in your business and you can use that information to start working on an EE Plan.

2. Start compiling a general Employment Equity Plan

Consider the likelihood of organisational growth and expansion, and analyse previous trends such as resignations, retrenchments, promotions and the like. Use this information to predict your staffing requirements for the next 12 to 24 month period – how many employees are you likely to need, at what level within the company, during this time.

You will now be able to see how it may be possible to improve diversity by recruiting and appointing future employees from the groups that are under-represented in your organisation.

3. Get your policies and procedures in order

Make sure that you have indicated a commitment to EE (and possibly even AA) in corporate policies and make sure that there are no barriers to the recruitment and advancement of women, people with disabilities or people of different races, cultural backgrounds or religious beliefs, in your recruitment policy. You may need some external help with this exercise, or you may wish to purchase a standard, off-the-shelf type procedure manual that allows you to easily customise policies according to your requirements.

4. Communicate

Many employees are afraid that the introduction of AA or EE initiatives in their workplace will mean that they cannot be promoted in future or that they will end up losing their jobs. Make sure that you eliminate fears and rumours by openly and continuously communicating and consulting with your employees about the demographic status quo, under-representation and any possible future plans. Also make sure that you clearly display a summary of the EEA (available from various vendors and from the Government Printer) in a place where all your employees can see it.

5. Pay equal money for equal work

Take steps to ensure that you are paying the same salaries for the same jobs, regardless of the race, gender or physical/mental ability of the people performing those jobs. You can purchase salary survey information from various vendors and you can also introduce basic job grading systems in your company to ensure fair remuneration across the board. If you do want to differentiate salaries, make sure that you can justify these on the basis of objective criteria, such as paying for performance, or length of service.

Complete these easy steps and you are well on your way to complying with the Employment Equity Act.

Useful resources

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