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The Employment Equity Regulations, 2025 came into effect on 15 April 2025, repealing and replacing the 2014 Regulations. Also in effect from 15 April 2025 is the Determination on Sectoral Numerical Targets which applies to 18 national economic sectors. The new Regulations and Determination introduce a significantly more prescriptive and compliance-driven framework, particularly for designated employers.
As of 1 January 2025, employers with fewer than 50 employees are no longer classified as ‘designated employers’, even if their annual turnover exceeds the previous thresholds. This means that the Determination does not apply to small employers with less than 50 employees and for the most part, the Regulations do not apply to small employers. The key changes set out below apply only to designated employers.
Key Changes
Designated employers are now required to prepare and implement Employment Equity Plans (EE Plans) covering a fixed five-year period from 1 September 2025 to 31 August 2030. The plans must align with the sector-specific numerical targets published by the Minister of Employment and Labour. Employers operating in more than one sector must apply the targets of the sector in which the majority of their employees are employed.
When determining annual employment equity targets, employers must set numerical targets for designated groups in each of the four upper occupational levels taking into account the applicable sector targets and the economically active population (EAP) (which includes job seekers). Employers must avoid over-representation of a group which already exceeds the applicable EAP in a particular occupational level.
When developing EE Plans, employers must take into account their workforce profile, applicable EAP, relevant sectoral numerical targets and, to the extent consistent with the purpose of the Employment Equity Act, inherent requirements of a job, pool of suitably qualified persons, workplace turnover rates and attrition, workplace recruitment and promotional trends. An employer that does not meet target must provide a justification such as limited recruitment opportunities, skills shortages, or economic pressures.
Sector-Specific Numerical Targets
Designated employers must align their EE Plans and targets with sectoral numerical targets published by the Minister of Employment and Labour under section 15A of the Employment Equity Act. These targets are aimed at ensuring equitable representation of suitably qualified persons from the designated groups at all occupational levels of a workforce.
The 5-year sectoral numerical targets are not intended to total 100% because they exclude foreign nationals and white males with no disabilities.
Reporting and Compliance
Annual employment equity reports (EEA2 and EEA4) remain compulsory and can be submitted by hand by no later than the first working day of October or electronically via the Department of Employment and Labour’s website by no later than 15 January.
Compliance Certificate
A major new compliance feature is the Employment Equity Compliance Certificate. This certificate is now required for all employers doing business with the State and is valid for 12 months. Employers must apply online after submitting their annual employment equity report. The Department may withdraw a certificate if it was issued based on a misrepresentation or a condition necessary for issuing the certificate no longer exists, but must follow a fair process before doing so.
What should employers do now?
Designated employers should:
- Review and update internal employment equity strategies in line with sectoral numerical targets.
- Identify their sector using the Department’s classification (EEA17) and apply the correct sectoral numerical targets.
- Set realistic annual targets and prepare internal justifications for any foreseeable shortfalls.
- Ensure the workforce analysis (EEA12) is up to date and supported by appropriate EAP data.
- Prepare to apply for a compliance certificate once their next employment equity report is submitted.
The Norton Rose Fulbright team is available to assist your business in navigating the new compliance landscape. Please contact them for further support.
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