Piet Le Roux & Gerhard Papenfus | April 21, 2025
Companies face another state attempt to exercise centralized control over SA's economic activity
The SA government released a new racial employment quota last week. This has directed businesses to reduce white men to 4% of their workforce.
The regulations have reported perhaps the most drastic racialization of the SA labor market, seeking to impose racial employment allocations on local and international businesses, threatening to destroy hundreds of billions of Rh’s with economic value if enforced with great enthusiasm.
According to the Employment Equity Act, the objective is to “ensure fair expression” of “designated groups” in employment across the country. But what this really means is the forced change in the labor force of all companies in the consequences of things like the Employment Equity Commission, President Cyril Ramaphosa, and the ANC, against those that reflect the racial composition of the country.
Such totalitarian interventions in corporate employment decisions would be an absolute disaster with job numbers and employment alone. But it is equally catastrophic to not complying with almost impossible regulations.
Losing a “number target” comes with a debilitating 10% sales fine, among other penalties. There is the theoretical possibility that the Department of Labor could issue temporary amnesty on a case-by-case basis for licensed companies, but this underscores the whimsical nature of regulations and makes business and investment planning a nightmare.
The law cleverly avoids calling these “racial allocations” and prefers “numerical targets” that look more e-tuned and more flexible. The distinction between quotas and targets is semantic. In fact, there are punitive sanctions if you miss them.
The Labor Bureau hopes to begin compliance this September. If the regulator is happy with your “progress”, then a full implementation could be allowed up to five years.
The quota currently applies to businesses with over 50 employees, but the threshold can be lowered on a legislative whim. The government's track record of shifting goalposts in racial economic policy makes this a question of when, not when.
Formal regulations divided the economy into 18 vague “sectors” and then employed in four categories called “top management,” “senior managers,” “specially qualified, middle managers,” and “skilled skills.”
Each category is then assigned three percent. One is a “specified group” male (i.e., male unless white), one is a “specified group” female (including white women), and the other is a “disability only.”
Healthy white men do not appear in regulations. The specified group is deducted from 100, and it remains.
Therefore, there is a matrix of 18 sectors, four employment categories, different racial group assignments, gender assignments, and a matrix of at least 576 variables optimized by central planners in the labor department.
For the “finance and insurance” business, “top management” is permitted to become 37% of white men, and rapidly declines through other categories until white men bottoms in the “skilled skills” category, which compensates for less than 4%.
At healthcare companies, white men need to make the most out of 29% and 4% respectively. 30% and 4% for management and support services (such as security companies). Mining companies, 29% and 4%. Educational institutions include 26% and 4%.
Agricultural businesses are currently limited to 66% to 6%. This is not as subtle as it tells white farmers that there is no place for the sons of the team.
However, the sector that really reveals the endgame of goal post-shifting for all sectors is “administration and defense.” Here, white men should be reduced to up to 8% of top management employees and the remaining 4%.
Subjected domestic sanctions and expropriation
In short, the new employment equity regulations aim to drive white people in general, and white men in particular out of their jobs. In reality, this is a targeted economic sanction on a portion of the domestic population.
Furthermore, in another controversial language of law in this country today, these mandatory employment directives are a form of expropriation, where states attempt to racially-based transfers of effective management of businesses without compensating existing owners.
Such targeted domestic economic sanctions are well-accepted and harmful, but are produced at less cost when strict enforcement forces businesses to hire people without the skills or conformance they need.
Business efficiency is greatly harmful. The decline in productivity ripples through the negative multiplier effect of color blinds, affecting business viability, investment terms and employment across the economy.
International impact
Since the original law was passed in 1996, as long as international companies have participated in employment equity, they may have developed tolerance for the SA government's unusual claims of race. Many outsourced human resources (HR) consultants with regular “employment equity plans” that they needed to submit, as they ensured that the company had their own flexible goals and that lacking targets was not a major issue.
But it will soon become clear for these companies that amended laws and regulations govern certain troubling race, gender and disability assignments so that they are met under penalties for fines, ultimately under personal prosecution and trade bans.
Eventually, we conclude that the board of directors of international companies operating in SA faces the world's most outrageous, impossible, and impossible, fairness, comprehensive programme.
Returns are so good, and some people erase it because they trust that such impossible programs always have loopholes and ultimately fail. But they continue to limit their expansion plans.
Others leave without registering in such absurd and fluid risk vector. This exposes owners and senior management to a wide range of ethical, moral and legal risks both within and outside the SA.
In any case, many international companies contact embassies. All of these conversations fuel the SA in a fire of international controversy where it finds itself around racialized economic policies.
New employment equity regulations seek to impose completely irrational operational obligations on thousands of companies. Minimal compliance and the greatest proper violations are widespread, as businesses prioritize the reality that they look after customers, employees and owners over virtually impossible bureaucratic fantasies.
Countless companies and their employees are, in principle and in fact, opposed to this harmful and unstable overracialization of the workplace. On the other hand, opposition from foreign companies and their representative embassies can be expected to escalate due to the potential diplomatic outcomes.
Additionally, groups such as Sakeliga, National Employers of SA (NEASA) have prepared a comprehensive litigation strategy against employment capital regulations on constitutional and practical basis.
Together, this forms a powerful and principled wave of opposition that should act as encouragement for businesses to stand up to another irresponsible attempt by the state to exercise full centralized control of SA's economic activity.
•Le Roux is CEO of Sakeliga and Papenfus CEO of Neasa.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
