Section 21 of the Employment Equity Act, 55 of 1998 (EEA) places an obligation on designated employers to submit an Employment Equity Report once every year on the first working day of October or, if an electronic report is submitted, on or before 15 January in the following year. Manual (and posted) submissions for 2017 therefore closed on 2 October, whereas online submissions have to be submitted by 15 January 2018. The purpose of an Employment Equity Report is to report on progress made on targets set in an EE Plan, which must be submitted or renewed every 3-5 years.
For all enterprises, it is important to understand the definition of the term ‘designated employer’. A designated employer is (i) an employer who employs 50 or more employees or (ii) an employer who employs fewer than 50 employees, but has a total annual turnover equal to or above the annual turnover threshold specific to the relevant sector. *See the schedule that sets out these annual turnover thresholds.
Non-compliance may have far-reaching consequences and affect a business adversely. Businesses may face fines of up to R2,7 million or 10% of annual turnover.
Under the Revised Codes for Good Practice a business will be verified on five elements, one of these being Management and Control. Without an Employment Equity Report, points may be forfeited for Management and Control on the BEE Scorecard. This will most certainly have a negative effect on the overall score and level of the BEE certificate.
All designated employers are required to put corrective measures in place to avoid very high penalties imposed by the Department of Labour.
While submitting the Employment Equity Report on time is crucial, employers are advised that this is not enough to ensure full compliance with the requirements of the legislation. Employers are also legally bound to ensure that the report’s contents are factual and accurate and that it reflects sufficient progress with affirmative action in the staffing of their organisations as required by the EEA.
Employers should plan timeously for Employment Equity purposes and seek professional advice from their Skills Development Facilitators to ensure that all reports are submitted on time. SERR Synergy are experts in the development and implementation of Employment Equity Reports and submission of the required reports. We guide businesses through the process to ensure that equity in their organisation meets the requirements of the EAA and also supports the growth and success of their business.
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