Staff Writer | 20 February 2025
The Department of Labour and Employment (DoL) will finalise consultations over South Africa’s new BEE targets by the end of February 2025 and publish two new employment equity regulations by the end of March.
This follows the new Employment Equity Amendment Act (EEAA) coming into effect on 1 January 2025.
The EEAA introduced several changes to South Africa’s black economic empowerment laws, including reducing the definition of designated employers to businesses employing more than 50 people and easing the administrative burden on small businesses.
However, one of the biggest additions was empowering the minister of employment and labour to set specific sectoral employment targets for designated employers to follow.
The DoL has drafted BEE regulations that require businesses in South Africa to employ a workforce that reflects the country’s “economically active population” (EAP), nationally or provincially.
These targets would apply across each of the 18 national economic sectors.
Broadly, the department wants all companies that employ more than 50 people to rapidly transform over the next five years and have their workforces more demographically representative.
This is especially true in top and senior management.
The orignal draft targets, published in 2023, set very specific numerical targets for the workforce across unskilled, semi-skilled, skilled and top management.
It also made a clear distinction between national and provincial EAP make-ups.
The updated draft in 2024 removed targets for the semi-skilled and unskilled levels—though still included a focus on EAP—and removed the distinction between provincial and national targets.
It also removed the distinction between specific racial groups, opting for “designated groups” in the targets.
Designated groups are defined in the Employment Equity Act as black people (Africans, Coloured, and Indians), women and people with disabilities who are citizens of South Africa by birth or descent.
As a practical example:
2024 draft regulations:
At least 40% of the top management of a manufacturing company must be from designated groups, while at least 15% must be women.
Original 2023 regulations:
The top management of a national manufacturing company must be 35% African (22% male, 13% female), 4% coloured (2.5% male, 1.5% female), 1% Indian (0.7% male, 0.4% female) and 8% white (4.5% male, 3.5% female).
While the numerical targets appear to be quotas—unlawful in South Africa—the government has argued that the five-year implementation period and ability to apply for exemptions disqualify that definition.
Regardless, analysts and experts have noted that the targets are highly problematic for businesses, sometimes requiring designated group representation to more than double.
Considering South Africa’s weak economic growth, high levels of unemployment and lack of necessary skills, businesses are unlikely to find success in meeting the targets.
Next steps
The DoL has been hosting roadshows and consultation sessions, trying to dispel “misconceptions” about the laws.
This includes explaining the justifiable reasons and grounds for which business can be exempted. These consultations will be completed by the end of February 2025.
Following the consultation process, the department will publish two more sets of regulations by the end of March 2025:
The General Administrative Regulations, which will contain the reporting forms, employment equity plan templates, enforcement tools and the employment equity compliance certificate template;
Regulations on the 5-year sector employment equity targets.
According to legal experts at Werksmans Attorneys, the department will then move on to conduct internal training for labour inspectors on the new laws and regulations to enforce them.
They said that, pending the publishing of the regulations, there is no certainty that the department’s way forward will materialise, but warned businesses to keep a close eye on developments.
“Employers…risk substantial financial sanctions and/or not being issued with a compliance certificate” should they be caught by surprise, they said.
Legal firm Cliffe Dekker Hofmeyr (CDH) noted that once the regulations are in effect, designated employers will have until 31 August 2025 to conduct a workplace analysis and develop new employment equity plans.
The 2025 reporting period will then run from 1 September 2025 to 15 January 2026, CDH said.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.