: By 15 January 2023, businesses are required to submit their Employment Equity Reports outlining the progress they are making in implementing their Employment Equity Plans. Missing this deadline, as well as failing to implement the other duties outlined in the Act, could result in a R1.5m to 2% of turnover fine, depending on what the particular non-compliance is.
The purpose of the Employment Equity Act is to eradicate unfair discrimination and to implement affirmative action, considering that there are still gaps from the past that need to be addressed.
Frik Boonzaaier, Senior Human Capital Consultant at The BEE Chamber, explains: “We have a history and today, we are still feeling the impact of that history therefore we need to do certain things to ensure that everyone can participate in the economy. Designated employers* need a solid plan to guide their EE implementation, and which they need to report against annually – it is important to report to ensure compliance, but also to outline your transformative approach in an EE Plan.”
EE Plans therefore need to show transformation rather than compliance only. “You need both, but we need to look beyond mere compliance. Although the report is a measure of how well a business is tracking in implementing the transformation plan, it is important to realise that a business needs an actual plan. It becomes very evident at the time of submitting a report if there is no plan against which implementation is reported.
“When you draft a plan, ensure you address the gaps between your current business profile in line with EAP (economically active population statistics), as well as looking at what makes it difficult to for previously disadvantaged individuals to access or progress within your business. The plan should then be developed such that it addresses both the EAP gaps and outlines the affirmative action measures you need to put in place to overcome the barriers. Look at the numbers, set the new numbers you want to achieve and show in your plan how over time you will get closer to the EAP; these are the main areas of your plan which will also be referenced in your reporting.”
Boonzaaier’s tips for successful reporting:
- Accuracy: It goes without saying that your report needs to be accurate and honest. Most inaccuracies appear because companies do not know how to complete the various tables.
- Consultation: It is important that both the EE Plan and EE Reports are consulted through an EE Committee, the members of which are nominated by their peers. Because the EE Committee will play a part in managing the process, they must have a thorough understanding of the Employment Equity Act.
- Report against the plan: “I cannot stress this enough: you need a plan to be able to submit a proper report. It is fraudulent to submit a report without a plan. The BEE Chamber meets with clients, assisting them with drafting a compliant and transformative Plan, or adapting their plan to be achievable, which is a key focus.” Businesses can prepare an EE Plan which spans between one and five years, with three years being the most common. The optimal duration will be based on the size and nature of the business. Objectives need to be outlined for each year of the plan.
- Time: The size of a company impacts the time needed for reporting. It is a fairly simple task for a small company, especially with the EAA2 Report (which includes the latest workforce profile, historical staff movements, as well as a focus on skill development). However, if you are a large business, allow adequate time, especially for completing the EEA4 Report which looks at differences in the terms and conditions of employment, as the necessary analyses can be tedious.
Amongst others, the EEA4 Report poses questions around whether a company has a policy to indicate the acceptable vertical pay gap. Therefore, the EE Plan should include affirmative action measures to overcome the vertical pay gap and identified income gaps between different groups. Without a policy, the questions posed on the EEA4 cannot be addressed effectively.
“Employment Equity can add enormous value to an organisation, provided it is understood and implemented correctly. Research has consistently shown that diverse companies outperform their counterparts in terms of important business imperatives, e.g., customer service, cashflow, profit, adaptability, etc. If we are truly committed to transformation and if we approach the EE Plan and EE Report effectively, it offers a structured approach which addresses both the transformation of a business, as well as ensuring compliance with the legislative employment equity framework.”
*Designated employer: an employer who employs 50 or more employees or an employer who employs fewer than 50 employees but has an annual turnover above the industry thresholds as reflected in Schedule 4 of the EE Act.
About The BEE Chamber
The BEE Chamber was established 2016 by BEESA (est. 2007) as the next evolution of a B-BBEE consulting partner - not a traditional consultancy. It aims to enable businesses in promoting South Africa’s diversity and equity policies, rather than leaving them reliant on isolated sets of complex information. As a group of specialised B-BBEE consultants, The BEE Chamber supports internal capacity and builds its clients’ B-BBEE practices to a level of excellence by using the tools of continuous support and engagement. It provides information, services and software to those practitioners who are responsible for managing a company’s B-BBEE Scorecard. For more information, visit www.bee.co.za