Perspectives on the World of Work

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Woe is me, Employment Equity...

The Employment Equity Amendment Bill was gazetted on 20 July 2020. This would be the last step to be followed before the parliamentary process commences, and the bill is eventually signed into law.

Employment equity and the management of the legal ramifications thereof often fills employers (especially in smaller businesses) with unnecessary dread. The thought of an audit revealing shortcomings in the employer’s policies and procedures and possibly facing a hefty fine at the end of the day is certainly not anything an employer would wish to experience.

The new bill seeks to minimise this administrative burden on employers by exempting employers with fewer than 50 employees from the designated employer status. This means that an employer with 50 employees or fewer will no longer need to submit EE plans etc, regardless of the turnover in the business. In the past, specific income thresholds were put in place for economic sectors.

It is important to note that this means 50 employees in a particular year, regardless of whether they are permanent, on fixed term contracts or seasonal workers.

The sticky issue in the current bill is that sectoral targets can be established by the Minister of Labour, in consultation with stakeholders. It would be critical for the different economic sectors to ensure that they are strongly represented in such consultations in order to ensure that equitable and achievable targets are set.

Employment equity makes business sense. Businesses with diversity in their make-up are more sustainable and management teams that consist of different races and genders make better business decisions. The fact that smaller businesses (in terms of number of employees) are exempt, does not mean that businesses should not be looking at diversity when hiring employees. This interesting study by McKinsey shows the correlation between diversity and improved decision making in a business:

If your business needs hiring and diversity advice with integrity, contact for a customised quote.

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