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30-January-2024-blog-70

Businesses Equipped by the DEL

The Department of Employment and Labour (DEL) in South Africa is equipping businesses with a “weapon” to navigate the newly implemented employment equity laws. These laws are designed to expedite transformation across all significant sectors within the nation.

Amendments to Employment Equity Laws

Proposed 2023 changes to employment equity (EE) laws aim to empower employers with the ability to consult and autonomously regulate their equity targets while providing them with an avenue to present valid reasons for non-compliance.

The department acknowledged that while these regulations might increase pressure on businesses, they simultaneously provide them with a potential “escape route”. In essence, under the revised EE legislation, businesses must formulate five-year strategies to achieve EE objectives. However, they can deviate from these targets, provided they have “justifiable reasons or grounds” to do so.

What Reasons Are Considered Valid for Non-Compliance?

Limited opportunities for promotion.

Restricted recruitment opportunities.

Scarcity of target individuals from the designated groups possessing the necessary qualifications, skills, and experience.

Orders from the Commission for Conciliation, Mediation, and Arbitration (CCMA) or court.

Business transfers.

Mergers or acquisitions.

Economic circumstances impacting the business, which can include the effects of the COVID-19 pandemic, power outages, and more.

These reasons were not arbitrarily chosen but the result of constructive dialogue. They were designed to provide businesses with ample “flexibility” navigating otherwise contentious targets. However, the responsibility still lies with businesses to validate these claims to the Department, which could potentially add to operations’ administrative and legislative demands.

The Significance of These Amendments

According to the regulations, all businesses in South Africa employing more than 50 individuals must adhere to the Department’s set targets and EE requirements. This applies irrespective of whether or not they conduct business with the state.

The Department of Employment and Labour emphasised that the purpose of these amendments is twofold: To lessen the regulatory load on small employers and to equip the Minister with the authority to stipulate sector-specific targets. The department also plans to enhance compliance by issuing EE compliance certificates, with non-compliance potentially leading to substantial fines and penalties.

Navigating Regulatory Changes
MMS Group offers leading tax consultancy and accounting services and stays updated with the latest regulatory changes to ensure our clients meet relevant compliance expectations. For more information on the services we offer, please reach out to our team.

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