Moonstone | April 24, 2025
A designated employer who has been waiting for clarity in employment stock regulation while twisting the old film industry saying “wait quickly,” now has to be turned into high gear. The much-anticipated regulations have come into effect officially and as of April 15th, marks the transition to voluntary compliance.
The Employment Equity Act (EEA) regulations for 2025 significantly raise compliance standards, implement stricter enforcement mechanisms, and focus on sector-specific numerical targets that must be met over a five-year period.
Designated employers (who have more than 50 employees or national institutions, regardless of staff size) must develop and implement employment equity plans for the period from September 1, 2025 to August 31, 2030.
According to the fifth edition of Employment Equity Amendments and 2025 EEA Rules GuidelinesEmployers issued by law firm Cliffe Dekker Hofmeyr (CDH) must conduct workplace analysis until August 31, 2025, to amend new employment equity plans and existing employment equity plans or compensate for them to match the revised legislative framework and defined sector targets.
The 2025 reporting period begins on September 1, 2025 and runs until January 15, 2026. During this window, the Ministry of Employment and Labor (DOEL) will begin issuing the first certificate of compliance.
However, employers will not be evaluated for progress in achieving departmental goals over the five years during this first cycle. Changes in 2026. From September 1, 2026 to January 15, 2027, employers will receive an initial assessment of their annual targets as part of assessing their progress in achieving their fifth year goals.
Designated Employer and Department Goals
On April 15th, Minister of Employment and Labor Nomahosazanames released the final version Determine the numerical target for the department and Employment Equity Regulation 2025. Together, these are called the 2025 EEA regulations. They will replace the regulations in 2014 and follow the implementation of the 2022 Employment Equity Amendment Act, which came into effect on January 1, 2022.
According to the CDH, the EEA applies widely to all employers operating in South Africa, except for the military, intelligence agency and the Secret Service. However, Sections 12-27 covering positive behaviors apply only to “specified employers,” a group currently narrowed by the amendment Act.
The revised definition reduces the burden of compliance for small and medium-sized businesses, regardless of sales, for employers with fewer than 50 employees. These small employers are exempt from filing stock plans and reports, but may apply for a certificate of compliance under Section 53 of the EEA, which we will go into more detail later.
The updated General Management EE regulations provide standardized forms of reports (EEA2 and EEA4), stock analysis and planning templates (EEA12 and EEA13), and compliance certification details. These tools are intended to make new rules easier to understand and apply, whether they are designated or not.
Final Sector Goal Regulations set five-year numerical employment equity targets for “designated groups” across 18 economic sectors, including finance, manufacturing, healthcare, education and construction.
Each sector has a single gender-based goal set, covering four upper occupational levels: senior and senior management, professionally qualified middle managers, and skilled technical roles. It also includes people with disabilities, and there are no further breakdowns due to race or gender.
There are no targets set for semi-skilled and unskilled positions. However, employers should consider national or state economically active population (EAP) figures when developing equity plans at these levels.
The target aims to increase representation of “designated groups” as defined by the EEA – Black South Africans (including Africans, colour and Indians), women and people with disabilities.
Legal experts from Welksman Note that the new approach is separate from previous methods of targeting per racial group using EAP data.
“This is a departure from the way designated employers had to target using economically active populations before, which required designated employers to target based on each particular specific group,” writes Anastasia Vatalidis, Kerry Fredericks, and Gracie Sargood.
Importantly, Target doesn't intend to total 100%, acknowledging that white men and foreigners are still employed.
Bowman'Talita Laubscher and Melissa Cogger should note that designated employers must set annual numerical targets tailored to the five-year divisional goals, EAP, and representations of people with disabilities.
“The general administrative EE regulations state that the way designated employers must consider sector goals and apply positive action measures is documented in the EEA, general administrative regulations, and the code of good practice issued under the EEA.”
Laubscher and Cogger added that overrepresentation needs to be addressed.
If the target for a specified group is already met or exceeded, the employer must set the target to maintain EAP compliance. In particular, the final rule removes the prohibition of “regression” in expressions.
Employers operating in multiple states can now apply EAPs from different states to reflect local workforce demographics. This is flexibility that is not found in previous draft regulations.
Certificate of compliance
Starting September 1, 2025, designated employers will begin their first reporting cycle under the revised EEA, ending January 15, 2026. For the first time, a compliance certificate will be issued by Doel, a requirement for doing business with the state.
These certificates, which are valid for 12 months, ensure that the employer meets the employment equity obligations, including providing a justification for compliance with the sector's numerical targets or not. Additional requirements include submitting an annual report, no results of unfair discrimination or minimum wage violation investigations over the past year, and complying with the national minimum wage law.
Section 53 of the Act, currently operating by the regulations of 2025, outlines the Compliance Certificate Application Process. online. Both designated and non-non-designated employers may apply. Unspecified employers must use the EEA15 form to declare compliance with the relevant laws.
If the employer has not met the requirements, it must provide a valid reason for the application.
Once approved, the certificate will be issued as EEA16A (for designated employers) or EEA16B (for undesignated employers).
If issued based on misrepresentation or if the qualification conditions no longer exist, the certificate may be withdrawn by the Minister, Labor Inspector, or a delegated Doel official. However, withdrawals can only occur after the employer is given 14 days to respond to formal notices.
A good reason protects employers from penalties for missing EE targets
If the employer has not reached either the annual numerical target or the 5-year sectoral numerical target, it must provide a valid reason for application.
Werksmans notes that designated employers have no penalties or disadvantages if they have reasonable grounds to justify their failure to comply with the target.
The justification for non-compliance is still unchanged since the 2024 Sector Target Draft and is repeated in general managed EE regulations.
There is good reason why designated employers failed to comply with their goals, as stated in their employment equity plans.
There are insufficient opportunities for recruitment.
There are insufficient promotion opportunities.
Inadequate target individuals from designated groups with relevant formal qualifications, previous learning, related experience or acquisition abilities are the ability to acquire the ability to do the job, as envisaged in sections 20(3) to (5) of the Act.
Impact of a CCMA Award or court order.
Relocating business;
Merger or acquisition. and
The impact of economic situation on business.
Slow fines under new rules
According to Werksmans, employers who do not meet the sector's numerical targets under the revised EEA could face financial penalties if they fail to provide a valid reason for a violation of compliance.
The CDH adds that while the EEA allows labor inspectors to issue compliance orders for certain failures, such as not consulting with employees or submitting employment equity plans, sections 15 and 15A, which deal with sector goals in particular, are excluded from this enforcement mechanism. This means that violations of these targets cannot be addressed in compliance order.
However, amendments to section 42 of the EEA require the Director to assess whether employers meet departmental goals. Otherwise, if the employer is unable to justify a violation of compliance, section 45 allows the Director to seek an order from the Labour Court or impose a fine outlined in Schedule 1 of the Act.
These penalties follow the slide scale based on previous violations of the employer and effectively deal with failure to meet sector goals, as failed to implement the employment equity plan.
Werksmans warns that failure to comply could result in substantial financial penalties and other enforcement actions.
Bowmans reflects this sentiment, noting that enforcement of departmental targets will have a major impact, especially on employers looking to do business with the state.
Understanding these goals and how they apply them to individual companies is important for employers who want to avoid sanctions and maintain eligibility for government contracts.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
