Why do companies need to report their progress on transformation to the Department of Labour?
Population statistics and growth projections indicated that companies will need to transform their workplace profiles on all levels if they wish to remain sustainable and to take advantage of future growth opportunities. This means that by building a “diamond”-shaped economy with a larger Black middle-class our society will be more stable because more people will share in the “economic pie”.
Therefore, the purpose of Employment Equity reporting is to monitor an employer’s progress in achieving this goal and in terms of the targets set out in their EE plan (sec 20). On the enforcement side, designated employers that are required to submit their reports in terms of sec 21 and sec 27 and who fail to do so, will be held liable for a R1.5 million fine or 2% of their annual turnover depending on which is greater.
Who is required to compile and submit their EE reports?
Every designated employer is required to report to the DOL annually. A designated employer is someone who employs more than 50 staff members or has an annual turnover that is equal or above the turnover as reflected in schedule 4 of the Act (which is illustrated below). Employers who wish to voluntarily comply with Chapter 3 of the Act are also required to complete this form.
Turnover threshold applicable to designated employers
Designated employers are required to comply with various sections of the Act such as nominating an Employment Equity committee (sec 16) and consulting with the committee (sec 17) on issues related to employment equity. Matters of consultation include conducting an analysis (sec 19), drafting and implementing an Employment Equity Plan (sec 20) and annually reporting to the Department of Labour (sec 21 and sec 27).
What document and information needs to be submitted?
In terms of sec. 21 and sec. 27 of the Employment Equity Act, every designated employer is required to submit a EEA 2 and EEA 4 documents to the Department of Labour.
An EEA 2 document is seen as all workforce movement within a selected reporting period, such as the recruitment, terminations, promotions and skills development of staff members. It is important to make use of a consistent reporting period as information can be lost resulting in confusion and frustration for the both the employer and the Department of Labour. The EEA 2 also includes the numerical goals, targets and barriers as set out in the EE Plan (sec 20), therefore a company cannot report if they do not have a current EE Plan in place.
The EEA 2 measures an employer’s numerical target against their actual workforce in order to determine if the employer is moving towards transformation and providing fair opportunities to all race groups and genders.
The EEA 4 in terms of sec 27 deals with income differentials. Every employer is required to submit their annual wage bill per race group, gender and occupational level to the Department of Labour which is reviewed by the Employment Conditions Commission. The Department of Labour will then be able to identify any discrepancies. Reasons for salary differentials are also described within the EEA 4 document. Reasons include qualifications, workload, years of service, etc.
An employer is required to discuss the EEA 2 document with their committee/forum (sec 16) before submitting the documents to the DOL as set out in (sec 17). The EEA 4 is confidential and is not required to be discussed with the committee before submitting the information to the Department of Labour.
By when is a designated employer required to submit their EE reports?
Designated employers must submit their report annually on the first working day of October or by the 15th of January of the following year in the case of electronic reporting. Employers who become designated on or after the first working day of April but before the first working day of October must only submit their first report on the first working day of October of the following year.
How and where can a designated employer submit?
A designated employer can submit by completing an EEA 2 and EEA 4 manually or by logging onto the Department of Labour website. The manual documents needs to be delivered to the Department of Labour before September within the same year of reporting and the online submission needs to be completed before the 15th of January of the following year. Online submissions also provide ease as the employer can submit anywhere.
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