BEE Alert

Employment equity reporting season open

Jenni Lawrence Jenni Lawrence

Employment equity reporting season is open and the clock is ticking

People often confuse employment equity with BEE.  While the two are related, they are both part of separate pieces of South African legislation.

Employment Equity (EE) Reporting has been a standard requirement for many companies but its importance has become even more significant.

Under the amended broad-based black economic empowerment (B-BBEE) codes of good practice, EE Reporting is a prerequisite – and it is now a compulsory requirement for designated employers - in terms of companies being deemed an “empowering supplier”.

In essence, if companies do not comply with certain regulatory requirements of the Employment Equity Act, Skills Development Act and Skills Development Levies Act, the organisation’s BEE certificate could be deemed null and void.

The Employment Equity Act applies to all employers, workers and job applicants, (except certain state-owned entities), i.e. designated employers, as follows:

  • employers with 50 or more workers, or whose annual income is more than the amount specified in Schedule 4* of the Act;
  • municipalities;
  • organs of State;
  • employers ordered to comply by a bargaining council agreement;
  • any employers who volunteer to comply.

Schedule 4 of the Act specifies the turnover thresholds for different industries:

Sector

Threshold – Total Annual Turnover

Agriculture

R6 million

Mining and   Quarrying

R22.5 million

Manufacturing

R30 million

Electricity, Gas   and Water

R30 million

Construction

R15 million

Retail and Motor   Trade and Repair Services

R45 million

Wholesale Trade,   Commercial Agents and Allied Services

R75 million

Catering,   Accommodation and other Trade

R15 million

Transport,   Storage and Communications

R30 million

Finance and Business   Services

R30 million

Community,   Special and Personal Services

R15 million

Together with the requirement for annual reporting, employers are also required to have an EE Committee which consults with employees, prepares and monitors an EE plan and reports regarding their status annually, to the department of labour.

Failure to comply with the Employment Equity Act carries hefty fines.

Schedule 1 of the Act sets out the maximum fines that may be imposed for contraventions of various sections of the Act. The maximum fines commence at R 1 500 000 or the greater of 2% of turnover for a first transgression. The fines increase in relation to the number of successive transgressions. In the event of four transgressions related to the same provisions within three years, fines imposed extend up to R 2 700 000 or 10% of turnover.

Employment equity reports must be submitted online at www.labour.gov.za and the EE reporting period closes on 15 January 2017.

To discuss your EE Reporting requirements, or for further information, please contact us.