Greetings from Lanham-Love Consulting!
Following much confusion about the Employment Equity Amendment Bill (2020), signed into law last week by President Cyril Ramaphosa, we would like to take this opportunity to provide clarification and set the record straight!
Firstly, no changes have been made to the B-BBEE laws, as such. The changes that have been made are with regards to Employment Equity Targets and Employment Equity submissions. This legislation will take effect on 1 September 2023.
What Has Changed:
An amendment has been made to the definition of “Designated Employer” – a term used to identify which businesses the Employment Equity laws apply. A Designated Employer is now defined only as “an employer with more than 50 employees.”
There is no longer the option of a one, three, or five year plan. All companies with more than 50 employees will now be required to submit a five-year plan on how they will reach their targets. These targets will now be sector-specific, and set by the Minister of Employment and Labour.
There will be an Employment Equity Compliance Certificate issued to companies that comply with these targets. These certificates will be auto generated from your submitted EEA2 and EEA4 documentation, and will be important and may form part of your B-BBEE audit submission documents. It may also affect a business’ ability to participate in state tenders, and may be required to obtain business licences –this is not confirmed.
What Does This Mean for Your Business:
If your business has over 50 employees: You count as a Designated Employer! The above amendments apply to you.
If your business has less than 50 employees: You do not count as a Designated Employer!
However, you are still required to do your submission for 2022/2023. In August, you can then “de-register from Employment Equity reporting”. From this point on i.e. 2023/2024 – you will no longer need to report.
You are however still required to continue on your B-BBEE journey.
How Lanham-Love Consulting Can Help:
B-BBEE is here to stay, and the Employment Equity Amendment Act (2020) indicates that government is determined to continue putting pressure on businesses as far as transformation is concerned. While the less than 50 employee’s exemption is intended to reduce the regulatory burden on small employers, there are still opportunities for a higher B-BBEE score that could be worth investigating. For Designated Employers, reaching your sectoral targets may mean some additional planning.
Lanham-Love Consulting remains perfectly positioned to ensure that your business can achieve comprehensive B-BBEE compliance. We will continue to work hand-in-hand with our clients on an on-going basis, and manage and implement your B-BBEE strategy together over the year.