How the EEA Amendments Continue to Affect Employers and Employees
The amendments to South Africa’s Employment Equity Act (EEA) which took effect on 1 September 2023, continue to influence how business approach workplace compliance today. One of the most significant changes was the revised definition of a “designated employer.” Under the current law, only employers with 50 or more employees qualify as designated employers for the purposes of affirmative action. A company’s annual turnover is no longer considered when determining this status.
At CVN Attorneys, we assist employers and employees understand how these amendments work in practice. Whether you’re a small business, a large organisation, or an employee wanting to understand your rights under the amended Act, our team provides clear, practical guidance to help you remain informed and compliant in 2025.
What is the Employment Equity Act (EEA) and Why Does It Matter?
South Africa’s history of inequality created longstanding barriers to fair and equal employment. To address this, the Employment Equity Act 55 of 1998 (EEA) was enacted to address these issues by promoting:
- Equal opportunity;
- Fair treatment in the workplace;
- The elimination of discrimination;
- Affirmative action to redress past injustices.
The Act prohibits direct or indirect discrimination on numerous grounds including race, gender, disability, religion, age, language, culture, HIV status, political opinion, conscience, belief, culture, birth, family responsibility, ethic or social origin, and colour. pregnancy, sexual orientation, marital status,
However, only designated employers have additional responsibilities such as preparing employment equity plans and submitting annual reports. Since the 2023 amendment, a designated employer is now defined solely as an organization with 50 or more employees, regardless of their annual turnover. This amendment reduces the administrative burden on smaller businesses while ensuring that medium and large organisations remain accountable for equity and transformation in the workplace.
How Are Smaller Employers Be Affected by these Amendments?
If a business has fewer than 50 employees qualify as designated employers, it is no longer required to:
- Develop or implement an employment equity plan; or
- Submit annual employment equity reports to the Department of Employment and Labour.
This amendment removes significant compliance obligations for smaller businesses while still expecting them to maintain fair employment practices and avoid discrimination.
Will Smaller Employers Still Be Able to Obtain a Certificate of Compliance?
Yes. Employers with fewer than 50 employees) can still apply for a certificate of compliance under section 53 of the EEA, even though they no longer have to submit EE reports
This certificate is essential for businesses seeking to tender for government contracts and serves as confirmation that the employer complies with general requirements outlined in the Act.
Has the Definition of ‘People with Disabilities’ Changed?
The 2023 amendments also broadened the definition of “people with disabilities” to align with the international standards outlined in the United Nations Convention on the Rights of Persons with Disabilities (2007).
The updated definition includes individuals who have a long-term or recurring physical, mental, intellectual, or sensory impairments that, together with various barriers, significantly limits a person’s employment opportunities.
This encourages workplaces to become more accessible, inclusive, and supportive of employees with disabilities.
Is HPCSA Certification Still Required for Psychological Testing?
No. The EEA no longer requires psychological testing be certified by the Health Professions Council of South Africa (HPCSA).
Previously, the EEA required all such tests to be formally certified by the HPCSA to ensure fairness and prevent cultural or social bias in the workplace. However, this provision proved difficult to apply in practice, as questions arose over the HPCSA’s capacity to certify all tests and assessments used by employers across the country.
Under the current law, employers must still ensure that all assessments used in the workplace are:
- Scientifically valid;
- Reliable;
- Fair; and
- Free from discrimination.
Thus, the responsibility for ensuring fairness rests with the employer.
Understanding Sectoral Numerical Targets
Section 15A of the EEA introduced sectoral numerical targets to promote equitable representation of historically disadvantaged groups across all occupational levels.
These targets:
- Are developed per sector;
- Are published by the Minister of Employment and Labour;
- Reflect real workforce demographics and skills availability; and
- Serve as benchmarks for transformation within each industry.
How Do Sectoral Numerical Targets Affect Employment Equity Plans?
The introduction of sectoral numerical targets directly affects how designated employers must prepare and implement their employment equity plans.
Under the amended section 20 of the Employment Equity Act, designated employers are now required to ensure that their employment equity plan aligns with the numerical targets set for their sector.
Compliance is assessed based on whether the employer:
- Meets the sectoral targets; or
- Can provide a reasonable justification for not meeting them.
This ensures that transformation is measurable, realistic and aligned with industry standards.
Impact on Eligibility for State Contracts?
To qualify for government tenders, designated employers must obtain an EEA compliance certificate. Under section 53 of the EEA, this certificate can only be issued if a designated employer has:
- Met the numerical targets set for their sector; or
- Provides a valid and reasonable justification for any non-compliance.
This means that as of 2025, businesses applying for government tenders must not only have employment equity policies in place but also demonstrate measurable progress toward the targets outlined for their industry.
The change reinforces accountability and ensures that companies benefiting from state contracts actively contribute to South Africa’s transformation objectives, and ensures that employment equity progress to public procurement opportunities.
Are Sectoral Numerical Targets the Same as Quotas?
No. The Employment Equity Act clearly distinguishes between numerical targets and quotas.
A quota is rigid and inflexible. It reserves specific positions for certain groups and creates an absolute barrier to others, which amounts to unfair discrimination. Quotas are therefore prohibited under South African law.
Numerical targets, however, are flexible guidelines used to measure progress toward equitable representation in the workplace. They help employers set realistic goals that reflect the actual composition of their sector and available skills.
Under section 15A of the Act, the Minister of Employment and Labour has the discretionary authority to identify national economic sectors and set appropriate numerical targets for each. This process must be carried out in consultation with the relevant sectors and the Employment Equity Commission.
The purpose of these targets is to ensure that suitably qualified people from designated groups are fairly represented at all occupational levels, whilst considering real-world factors such as skills availability, industry demands, and workplace realities.
Have Reporting Requirements Changed?
Yes. Regulated by section 21 of the EEA, the Minister of Employment and Labour can now determine:
- How employment equity reports must be submitted; and
- When submissions are due.
Thus, a designated employers must monitor updates from the Department of Employment and Labour to ensure timely compliance.
How Have the Amendments Clarified the Consultation Requirements with Trade Unions?
The amendments to section 16 of the Employment Equity Act now provide greater clarity on who designated employers must consult with during the employment equity process.
Under the current law, if a representative trade union exists in the workplace, the employer is required to consult only with that trade union and not directly with individual employees. This applies to discussions relating to:
- The implementation of the employment equity plan,
- The analysis of employment barriers that negatively affect designated groups, and
- The content and submission of the employment equity report.
If no representative trade union is present, employers must consult directly with employees or their elected representatives.
This clarification helps simplify the consultation process and ensures that communication channels remain structured, fair, and compliant with the Act.
How Have the Powers of Labour Inspectors Changed?
Under the amended section 36, a labour inspector can once again request written undertakings from designated employers who are not complying with the EEA. This means that inspectors can once again request employers to formally commit to rectifying areas of non-compliance before further enforcement action is taken.
The reinstatement of this power helps promote a more cooperative approach to compliance., allowing the Department of Employment and Labour to encourage corrective action before resorting to formal enforcement.
Have There Been Any Changes to Compliance Orders and How They Relate to Numerical Targets?
Yes. The 2023 amendments to the Employment Equity Act introduced several important updates to section 37, which deals with compliance orders.
Under the current framework, the Minister of Employment and Labour may make regulations outlining how compliance orders should be served on designated employers that fail to meet their obligations under the affirmative action provisions of the Act.
However, it’s important to note that sections 15 and 15A (the sections dealing with affirmative action measures and sectoral numerical targets) are not included in the list of provisions that can trigger a compliance order. This means that failure to meet a numerical target does not automatically result in a compliance order being issued by a labour inspector.
Instead, non-compliance with sectoral targets is handled under section 42, which now includes an assessment of whether an employer has met the applicable sectoral targets. If an employer fails to comply and cannot reasonably justify same, the Director-General may apply to the Labour Court for an order compelling compliance or impose a fine.
When Did the Amendments Take Effect — and What Do They Mean in 2025?
All amendments took effect on 1 September 2023, following their publication in the Government Gazette No. 48821 earlier that year.
In 2025:
- Designated employers must ensure their employment equity plans align with sectoral targets;
- Employers bidding for state contracts must meet or justify their progress towards these targets;
- Reporting requirements are governed by updated regulations; and
- Compliance is measured more strictly than previously.
Partner with CVN Attorneys for Employment Equity Compliance
The Employment Equity Act remains a vital tool for promoting fairness, equal opportunity and meaningful transformation in the workplace. Two years after the latest amendments took effect, compliance requires not only understanding the law, it’s about applying it correctly in daily business operations.
At CVN Attorneys, we assist employers with:
- Drafting and reviewing employment equity plans;
- Workforce analytics and barrier analysis;
- Preparing for inspections;
- Applying for compliance certificates;
- Understanding numerical targets; and
- Ensuring readiness for state procurement requirements.
Our goal is to simplify compliance, reduce risk, and ensure that your business meets both the letter and the spirit of the law.
For tailored guidance on your organisation’s employment equity responsibilities 2025, contact CVN Attorneys, your trusted partner in labour law and workplace transformation.