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Talita Laubscher and Melissa Cogger | 5 May 2025 To ensure compliance with their affirmative action obligations under the Employment Equity Act, 1998 (EEA) and the newly enacted Employment Equity Regulations, 2025 (General Administrative EE Regulations), designated employers must first conduct a workplace analysis as required by section 19 of the EEA.  In terms of section 19, a designated employer is required to collect information relating to its employment policies, practices, procedures and the working environment in order to identify employment barriers that adversely affect people from designated groups. What this entails is more fully explained in the explanatory paragraphs contained in the EEA12 form in the General Administrative EE Regulations, which largely reflect what is also set out in the Code of Good Practice on the Preparation, Implementation and Monitoring of the Employment Equity Plan (Code), which Code remains applicable. According to the EEA12 form, barriers may contribute to the under-representation of employees from designated groups, or the lack of affirmation of diversity in the workplace. The analysis is also intended to identify practices or factors that positively promote employment equity and diversity in the workplace, including reasonable accommodation. The analysis includes a ‘critical examination’ of, among other things: recruitment, selection, pre-employment testing , promotion, retention, succession planning, training opportunities, and so on. A full list of policies, practices and conditions that are required to form part of the analysis are set out in the EEA12 form, however, this is not a closed list, and the Code provides that further columns and rows may be added by a designated employer. A workforce profile analysis This analysis must include a workforce profile in order to determine the degree of under-representation of people from designated groups in the various occupational levels in the workplace, as compared to the economically active population (EAP) and the five-year sector targets. Which EAP to use The EEA8 form in the General Administrative EE Regulations, read with the EEA12 form, provides a guide for designated employers when it comes to the applicable EAP. According to these forms, employers are required to refer to the Statistics South Africa Quarterly Labour Force Survey of the third quarter when determining the EAP and conducting the analysis. This information can also be found in the Commission for Employment Equity Annual Report. If the employer operates in more than one province, it must consider the nature and geographical area of its operations and adopt either (i) the national EAP, (ii) the provincial EAP for each of the provinces in which it operates, or (iii) the provincial EAP of the province where the largest part of its operations is conducted. Once the applicable EAP has been chosen, it must be used when preparing the employment equity plan (EE Plan) and reporting to the Department of Employment and Labour in terms of section 21, and it must be utilised for the full duration of the EE Plan. That said, if the national EAP or the provincial EAP in which the largest part of the operations is conducted is used, the employer must nevertheless have regard to the variations between the EAPs of different provinces when setting numerical targets. In addition to the EAP, the employer must use the five-year sector targets when conducting the analysis to determine the degree of under-representation. How to record the analysis Employers will need to use the updated EEA1 form to collect the information necessary for the workforce profile, i.e., information relating to an employee’s race, gender, disability status and whether they are a foreign national. This form will need to be completed by all employees (both permanent and temporary) and assists the employer in determining which employees are from ‘designated groups’ for purposes of the EEA. The contents of this form must remain confidential and be used only for purposes of compliance with an employer’s obligations under the EEA. Should employees refuse to complete the form, designated employers can rely on reliable historical and existing data, noting that persons with disabilities have a right not to declare their disabilities. Among other changes that have been made to the form, the EEA1 form now reflects the expanded definition of ‘people with disabilities’, being ‘people who have a long-term or recurring physical, mental, intellectual or sensory impairment, which in interaction with various barriers, may substantially limit their prospects of entry into, or advancement, in employment’. It also provides space for people with disabilities to indicate whether they require reasonable accommodation and if so, to specify what that accommodation might look like. The data from these EEA1 forms will then need to be reflected on the EEA12 form, where employers will capture the workforce profile figures and the over-representation or under-representation of particular groups (designated or non-designated) in each occupational level, with reference to the applicable EAP and sector targets. Completion of the EEA12 form is required in order to comply with section 19 of the EEA. The EEA12 form will also be used to capture the information relating to any barriers identified in the employer’s policies, practices or procedures and the affirmative action measures that are proposed to respond to such barriers. These will inform the non-numerical goals outlined in the EE Plan.  Timing For purposes of the workplace profile, a snapshot of the employee distribution in the various occupational levels in terms of race, gender and disability must be taken on a particular date. The EEA12 form contemplates that this date will be the last day of a month. Whilst the General Administrative EE Regulations do not prescribe the month in which the snapshot should be taken, the timelines are tight, considering that all designated employers’ EE Plans will need to be finalised by 1 September 2025 (being the prescribed start date for all EE Plans, in line with the five-year sector targets), and that employers are required to consult on both the analysis and EE Plan. Given these timeframes, it would be advisable for employers to use 31 May 2025 as the snapshot date. If this date is used, the EEA1 forms could then be collected during the month of May. Employers would then prepare the draft barrier analysis by early June 2025 and use the month of June to consult with employee representatives on the contents of the analysis. The analysis would then be finalised at the end of June 2025. In parallel, the employer should prepare its new EE plan and have a draft ready for consultation by early July 2025.  Written by Talita Laubscher and Melissa Cogger, Partners and Chloë Loubser, Knowledge and Learning Lawyer, Bowmans South Africa ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.polity.org.za/article/south-africa-considerations-for-designated-employers-when-conducting-their-workplace-analysis-2025-05-05

Ihsaan Bassier and Leila Gautham | 5 May 2025 New research shows the company you work for makes the biggest difference. Why do women earn less than men? The usual suspects – occupation, hours, experience – explain some of it. However, a powerful, often overlooked reason is simply this: where women work. The companies that hire them play a huge role in shaping their lifetime earnings. South Africa has a severe gender pay gap, much of which is unexplained by worker characteristics such as occupation, skills, or experience. In our new study published in the Journal of Development Economics, using tax data on the universe of formal workers in South Africa, we uncover a striking fact: nearly half of the gender pay gap in South Africa is explained by women working at lower-paying companies than men. That is, more women tend to work at companies that pay all workers less. In addition, this phenomenon evolves dramatically over a woman’s life. We tracked millions of workers between 2010 and 2018 using tax data. We wanted to figure out how much money different companies paid, relative to each other, regardless of the type of worker. To do this, we compared what two companies pay the same worker. We looked at workers who switched companies and compared how their pay changed when they moved to a new company. By doing this for many workers and companies, we can see how much more or less companies tend to pay people with the same kind of background or job. In the formal sector in South Africa, women, on average, get paid 12% less than men. We find that about 45% of this gap – 5.5 percentage points – is due to women being concentrated in firms that pay less overall (to both women and men). This isn’t because women are paid less within the same company – that kind of direct discrimination plays a much smaller role. Instead, it’s largely about sorting: women and men end up at different companies, and those pay differently. Women disproportionately enter lower-paying sectors such as education, retail, or personal care, while men are over-represented in high-premium sectors like construction, mining, and manufacturing. As labour and development economists , we argue that reducing the gender pay gap takes more than putting women into male-dominated jobs or promoting equal pay for equal work. It means tackling the invisible structures that steer women into lower-paying companies. A gender gap that grows, then shrinks What’s particularly revealing is how the firm-pay gap changes across the life cycle. For workers in their early 20s, this gap is almost nonexistent. But from the mid-20s to the mid-40s – roughly the child-rearing years – the gap widens significantly. Why does this happen? First, women who remain continuously employed through their 30s tend to move to worse-paying firms than men, even though they switch jobs at similar rates. Second, women entering or re-entering formal work (after a spell of unemployment or informal work) tend to start at lower-paying firms than men. This disadvantage when re-entering contributes to the overall gap, but is more constant over the life cycle. Interestingly, churn (moving in and out of employment) is common, but men and women do it at similar rates. The key difference is what type of firm they land in when they return. Nearly half the gap among entrants is explained by industry sorting – women disproportionately enter lower-paying sectors such as education, retail, or personal care, while men are overrepresented in high-premium sectors like construction, mining, and manufacturing. This isn’t because women have fewer (or different) skills. That might be another contributor to the overall gender gap in pay, but it’s not what we looked at. This is the pay disadvantage women face from being at firms that pay less for the same job or skill. The firms that women join tend to be in lower-paying industries, have fewer resources, and are less likely to be covered by collective bargaining agreements (union-negotiated industry wages) that boost pay. Just like men, women leave or re-enter formal jobs at the same rates as men, and are, in fact, just as likely to switch jobs when employed. The problem then is that their job switches are less likely to lead to upward moves in the pay hierarchy, possibly due to employer discrimination or a need to prioritise non-pay job characteristics (like flexibility). Then something remarkable happens. As women age into their late 40s and 50s, the gender gap begins to close. They start making more advantageous moves than men. This is likely because they have been sorted into lower-paying firms earlier in their careers and have more room to climb. And with child-related constraints easing later in life, they finally can. Firms in developing countries Our finding – that women ending up in lower-paying companies accounts for nearly half of the pay gap – is higher than estimates from high-income countries like Portugal or Italy , where it explains around 20%-25% . However, in developing countries like Brazil and Chile, the contribution is similar to what we find . Why do firms matter more in places like South Africa? Labour markets are more “monopsonistic” – firms have more power to set wages due to high unemployment and few outside options for workers . So because formal jobs are scarce, entering or moving up within the formal sector is harder, especially for women. In fact, we show that in regions of South Africa with lower levels of formality, the gender gap in firm pay is wider. Policy takeaways One instructive exception is the public sector, where the state has actively pursued gender equity in hiring. Public administration employs a much higher share of women than men and offers relatively high pay premiums. In developing countries especially, where formality is limited and transitions into good jobs are harder, policy can focus on easing women’s access to high-paying companies. This can mean policies that support childcare, promote flexibility without penalising pay, or reduce discrimination in hiring. Otherwise, sorting into low-paying firms will keep reproducing the gender pay gap, one job move at a time. Ihsaan Bassier , researcher in economics, University of Surrey and Leila Gautham , lecturer in economics, University of Leeds This article is republished from The Conversation under a Creative Commons licence. Read the original article . ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.moneyweb.co.za/moneyweb-opinion/soapbox/why-are-women-paid-less-than-men-in-sa/#:~:text=Instead%2C%20it's%20largely%20about%20sorting,construction%2C%20mining%2C%20and%20manufacturing .

Sunday World | 28 April 2025 Employers who employ 50 or more employees must prepare and implement an Employment Equity (EE) Plan for the period from September 1, 2025  until August, 2030 to align with the time frames of the five years of the sectoral Employment Equity (EE) targets.   Department of Employment and Labour’s deputy director of employment equity, Masilo Lefika, said this during a workshop organised as part of capacity building to prepare the EE inspectors when conducting inspections and enforcement to improve compliance with the new legislation.  More than 50 Department of Employment and Labour inspectors specialising in employment equity were put through their paces to get them ready for the implementation of the EE Amendment Act, No 4 of 2022, which came into force on January 1, including its EE regulations published on April 15.   The training workshop for employment equity inspectors focused, among others, on how to ensure implementation and compliance with the EE amendments, EE regulations, the implementation of five-year sector EE targets for the 18 economic sectors, and on the use of the EE online system to capture EE reports and request EE certificate of compliance.  Lefika said the five-year sectoral numerical targets are key milestones towards achieving the equitable representation of the different designated groups within the four upper occupational levels in an employer’s workforce about the demographics of the applicable economically active population, and for persons with disabilities.  He said the designated employer must comply with the numerical targets set in terms of section 15A (3) for the economic sector in which they operate.  Lefika noted that a designated employer will incur no penalty or any form of disadvantage if there are reasonable grounds to justify its failure to comply with any annual EE target.  The justifiable reasons to be considered for failure to comply with the annual EE targets were also outlined. Among them are insufficient recruitment opportunities, insufficient promotion opportunities, insufficient target individuals from the designated groups with the relevant qualifications, skills and experience, and the impact of economic circumstances on the business.  ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/labour-gets-tough-over-employment-equity/

SA News | 4 May 2025 Deputy President Paul Mashatile will on Monday, take part in a business breakfast engagement session on the Transformation Fund. The Transformation Fund is a key initiative aimed at accelerating transformation and supporting black-owned and black-managed businesses across various sectors in South Africa.The session which will be hosted by the Minister of Trade, Industry and Competition (DTIC), Parks Tau will be held at Freedom Park Heritage Site and Museum in Pretoria. The meeting will be held in conjunction with the National Empowerment Fund. It will provide valuable insights into the fund, whose objectives and scope of benefits include promoting economic transformation through enabling meaningful participation of black people in the economy by providing financial and non-financial support to black-owned enterprises. “The Transformation Fund also aims to improve access to funding for black-owned and controlled enterprises, particularly small, medium, and micro enterprises (SMMEs) and cooperatives; aggregate resources from existing Enterprise and Supplier Development (ESD) obligations to support the sustainability and growth of black-owned businesses, and mobilising financial resources from both the private and public sectors using Broad-Based Black Economic Empowerment (B-BBEE) legislation,” said the Presidency in a statement on Sunday. Last month, Minister Tau announced the extension of the deadline for public comments on the Draft Transformation Fund Concept Document. The extension is until 28 May 2025, from the original date of 7 May 2025. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.sanews.gov.za/south-africa/deputy-president-take-part-transformation-fund-engagement-session

Learnerships, internships, and apprenticeships  are all forms of Skills Development Initiatives that can contribute to a company's B-BBEE (Broad-Based Black Economic Empowerment) scorecard in South Africa. In the B-BBEE codes, learnerships, internships, and apprenticeships are measured through the following elements: Skills development expenditure : This refers to the money that a company spends on training and development initiatives, including learnerships, internships, and apprenticeships. Learnerships: A learnership is a structured learning programme that combines theoretical training with practical workplace experience. The B-BBEE codes require companies to provide a certain percentage of their learnerships to Black people. Internships: An internship is a short-term work placement that provides practical work experience to students to achieve their qualification. Apprenticeships: An apprenticeship is a structured training programme that combines on-the-job training with classroom instruction. To earn points on the Skills Development element of the B-BBEE scorecard, a company must meet certain targets for Learnerships, Internships, and Apprenticeships, as well as spend a minimum amount on Skills Development initiatives. The specific targets and requirements may vary depending on the size and sector of the company, as well as other factors. What is a Learnership? A learnership in South Africa is a vocational education and training programme that combines theoretical knowledge with practical skills. The purpose of a learnership is to provide young people with the opportunity to acquire the knowledge, skills and workplace experience they need to prepare for a career in a specific field. Learnerships are typically designed for people who have completed their schooling but have not yet acquired the necessary skills and experience to enter the job market. They are also available to people who are already employed but want to acquire new skills or improve their existing ones. Learnerships are offered by companies and training institutions. They are regulated by the Department of Higher Education and Training and are based on nationally recognised qualifications. The ultimate aim of learnerships is to reduce unemployment and to equip people with the skills they need to contribute to the economy of South Africa. What is an Internship? An internship in South Africa is a temporary work experience programme designed to give individuals, often students or recent graduates, the opportunity to gain practical experience in a specific industry or field of work. It is usually a fixed-term position, typically ranging from a few weeks to a year, during which interns work alongside experienced professionals to learn about the industry, develop their skills, and build their professional network. Internships in South Africa can be paid or unpaid, and they are offered by a wide range of organisations, including private companies, non-profit organisations, and government agencies. Some internships may require specific qualifications or experience, while others may be open to students or recent graduates from any discipline. Interns in South Africa may be responsible for a variety of tasks, from administrative duties to more specialised projects. The specific responsibilities will depend on the industry and the individual internship programme. The goal of an internship in South Africa is to provide valuable work experience and to help interns prepare for their future careers.   What is an Apprenticeship? An apprenticeship in South Africa is a structured training programme that combines on-the-job training with classroom instruction. It is designed to prepare individuals, often young people or school leavers, for skilled occupations in a specific industry or trade. During an apprenticeship in South Africa, the apprentice works alongside experienced professionals, known as mentors or trainers, to gain practical skills and knowledge in a specific trade or profession. The apprentice is typically required to complete a certain number of hours of on-the-job training, as well as attend classes or courses at a technical college or training centre. Apprenticeships in South Africa can vary in duration, depending on the industry and trade. They can range from a few months to several years. Apprenticeships are available in a wide range of industries, including construction, engineering, electrical, plumbing, and automotive, among others. At the end of an apprenticeship, the apprentice will be assessed on their skills and knowledge to determine if they have met the requirements to become a qualified tradesperson. Apprentices who successfully complete their apprenticeship will receive a recognised qualification or trade certificate, which will help them in their future career.

Based on Statement 300 of the General Amended B-BBEE Codes of Good Practice , an organisation can only claim Skills Development Expenditure for Learnerships if an organisation incurred such an expense within their financial year.   Evidence for a Learnership for a B-BBEE Verification under the Skills Development element include, however, are not limited to: A signed Learnership Agreement; Proof of the expenditure incurred by providing invoices and proof of payment; A certified copy of a Beneficiary’s ID; A completed EEA1; Proof of Payslips; Doctor’s confirmation of Disability (if applicable); and An interview between the Learner and the B-BBEE Rating Agency conducting the B-BBEE Verification. Skills Development Services   are available to assist Members with B-BBEE Verification requirements under the element of Skills Development.

On 22 April 2025, the Legal Sector Charter Council (LSCC) was established. Part of the Notice included the following:   “The LSCC will soon undertake a number of stakeholder engagement sessions aimed at clarifying the provisions of the LSC; and responding to any queries stakeholders may have. The LSCC also wishes to advise that the Legal Sector Transformation Fund has been established. Legal practitioners and stakeholders wishing to contribute to the Legal Sector Transformation Fund will soon be able to do so. A separate communication will be issued by no later than 30 April providing further details. The LSCC is committed to assisting all practitioners and stakeholders with any information they require in order to ensure clarity on compliance with the LSC. While it is in the process of setting up a website, a dedicated email address is included herein in order for stakeholders to in the meantime communicate with the LSCC. The LSCC will endeavour to respond to such queries in a timely manner. Queries can be sent to: info@lscc.org.za .” The BEE Chamber  is looking for to future engagements with the LSCC.

Moonstone | 24 April 2025 In a twist on the old movie industry saying of “hurry up and wait”, designated employers who have been waiting for clarity on the employment equity regulations must now shift into high gear. The long-awaited regulations have officially come into effect, signalling a move from voluntary to mandatory compliance as of 15 April. The 2025 Employment Equity Act (EEA) Regulations significantly raise the bar for compliance, introducing stricter enforcement mechanisms and placing a sharp focus on sector-specific numerical targets that must be met over a five-year period. Designated employers – those with 50 or more employees or organs of state, regardless of staff size – are now required to develop and implement an Employment Equity Plan for the period 1 September 2025 to 31 August 2030. Employers who become designated after 1 April 2025 will need to draft a plan covering the remainder of this five-year timeframe. According to the fifth edition of the Employment Equity Amendments and 2025 EEA Regulations Guideline , published by law firm Cliffe Dekker Hofmeyr (CDH), employers have until 31 August 2025 to conduct a workplace analysis and either draft new or amend existing Employment Equity Plans to align with the amended legislative framework and prescribed sector targets. The 2025 reporting period opens on 1 September 2025 and runs until 15 January 2026. During this window, the Department of Employment and Labour (DoEL) will begin issuing the first certificates of compliance. However, employers will not be assessed on their progress towards achieving the five-year sectoral targets during this initial cycle. That changes in 2026. From 1 September 2026 to 15 January 2027, employers will undergo their first evaluation against the annual targets as part of assessing their progress in achieving the five-year goals. Designated employers and sectoral targets On 15 April, the Minister of Employment and Labour, Nomakhosazana Meth, released the final versions of the Determination of Sectoral Numerical Targets and the Employment Equity Regulations 2025 . Together, these are referred to as the 2025 EEA Regulations. They replace the 2014 regulations and follow the implementation of the Employment Equity Amendment Act of 2022, which officially came into force on 1 January 2025. According to CDH, the EEA applies broadly to all employers operating in South Africa, excluding the military, intelligence services, and secret service. However, sections 12 to 27 – covering affirmative action – apply only to “designated employers”, a group now narrowed by the Amendment Act. The revised definition excludes employers with fewer than 50 employees, regardless of turnover, easing the compliance burden on small businesses. Although these smaller employers are exempt from submitting equity plans and reports, they may still apply for a compliance certificate under section 53 of the EEA – but more on that later. The updated General Administrative EE Regulations provide standardised forms for reporting (EEA2 and EEA4), templates for equity analysis and planning (EEA12 and EEA13), and details about compliance certification. These tools aim to help employers understand and apply the new rules more easily, whether they are designated or non-designated employers. The final sector target regulations set out 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 set of targets based on gender and covering four upper occupational levels: top and senior management, professionally qualified and middle management, and skilled technical roles. People with disabilities are also included, without further breakdown by race or gender. No targets have been set for semi-skilled and unskilled positions. However, employers must consider national or provincial Economically Active Population (EAP) figures when developing equity plans for these levels. The targets aim to increase representation of “designated groups” – black South Africans (including Africans, Coloureds, and Indians), women, and persons with disabilities – defined in the EEA. Legal experts from Werksmans note that the new approach moves away from the previous method of setting targets per racial group using EAP data. “This is a departure from the manner in which designated employers previously had to set targets using the Economic Active Population, whereby designated employers had to set targets based on each specific racial group,” write Anastasia Vatalidis, Kerry Fredericks, and Gracie Sargood. Importantly, the targets are not meant to total 100%, acknowledging that white men and foreign nationals will continue to be employed. Bowmans ’ Talita Laubscher and Melissa Cogger note that designated employers must set annual numerical targets aligned with the five-year sectoral goals, the EAP, and the representation of persons with disabilities. “The General Administrative EE Regulations state that the manner in which designated employers must take the sector targets into account and apply the affirmative action measures is set out in the EEA, the General Administrative EE Regulations, and the codes of good practice issued under the EEA.” Laubscher and Cogger add that over-representation must be addressed: “The 2025 General Administrative EE Regulations discourage designated employers from perpetuating the over-representation of any group if their representation exceeds the applicable EAP in a particular occupational level.” In cases where a designated group’s target is already met or exceeded, employers must still set targets to maintain EAP compliance. Notably, the final regulations remove the draft 2024 ban on “regression” in representation. Employers operating across multiple provinces can now apply different provincial EAPs to reflect regional workforce demographics – a flexibility absent from the previous draft regulations. Certificates of compliance From 1 September 2025, designated employers will begin the first reporting cycle under the amended EEA, which ends on 15 January 2026. For the first time, certificates of compliance will be issued by the DoEL – a requirement for doing business with the state. These certificates, valid for 12 months, confirm that an employer has met its employment equity obligations, including adherence to the sectoral numerical targets or providing valid reasons for not doing so. Additional requirements include submitting an annual report, having no findings of unfair discrimination or minimum wage breaches in the past year, and complying with the National Minimum Wage Act. Section 53 of the Act, now operationalised by the 2025 Regulations, outlines the application process for a compliance certificate, which must be submitted online . Both designated employers and non-designated employers may apply. Non-designated employers must declare compliance with relevant legislation using the EEA15 form. If an employer falls short of any requirement, it must provide justifiable reasons in its application. Once approved, certificates will be issued as EEA16A (for designated employers) or EEA16B (for non-designated employers). Certificates may be withdrawn by the minister, a labour inspector, or a delegated DoEL official if issued based on misrepresentation or if the qualifying conditions no longer exist. However, withdrawal can only occur after the employer is given 14 days to respond to a formal notice. Justifiable reasons protect employers from penalties for missing EE targets If an employer falls short of either the annual numerical targets or the five-year sectoral numerical targets, it must provide justifiable reasons in its application. Werksmans notes that a designated employer will incur no penalty or disadvantage if there are reasonable grounds to justify its failure to comply with any target. The justifiable reasons for non-compliance are repeated in the General Administrative EE Regulations, which remain unchanged from the Draft 2024 Sector Targets. There are seven justifiable reasons for a designated employer’s failure to comply with its targets as set out in its Employment Equity Plan. These are: insufficient recruitment opportunities; insufficient promotion opportunities; insufficient target individuals from designated groups with relevant formal qualification, prior learning, relevant experience or capacity to acquire, within a reasonable time, the ability to do the job, as contemplated by sections 20(3) to (5) of the Act; the impact of a CCMA award or court order; a transfer of a business; mergers or acquisitions; and the impact of economic conditions on the business. Steep fines under new rules Designated employers that fail to meet sectoral numerical targets under the amended EEA could face financial penalties if they cannot provide valid reasons for their non-compliance, according to Werksmans. CDH adds that although the EEA allows labour inspectors to issue compliance orders for certain failures – such as not consulting with employees or not submitting employment equity plans – sections 15 and 15A, which deal specifically with sectoral targets, are excluded from this enforcement mechanism. This means non-compliance with these targets cannot be addressed through a compliance order. However, an amendment to section 42 of the EEA now requires the Director-General to assess whether an employer has met the sectoral targets. If not, and the employer cannot justify its non-compliance, section 45 empowers the Director-General to seek an order from the Labour Court compelling compliance – or to impose fines as outlined in Schedule 1 of the Act. These penalties follow a sliding scale based on the employer’s previous contraventions and effectively treat failure to meet sectoral targets as seriously as failing to implement an employment equity plan. Werksmans has cautioned that failure to comply could result in substantial monetary penalties and other enforcement actions. Bowmans has echoed this sentiment, noting that the enforcement of sectoral targets will significantly affect designated employers, particularly those seeking to do business with the state. Understanding these targets – and how they apply to individual businesses – will be critical for employers hoping to avoid sanctions and maintain eligibility for government contracts. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.moonstone.co.za/new-employment-equity-regulations-raise-the-stakes-for-employers/

Pieter Steyn | 23 April 2025 On 19 March 2025, the Department of Trade, Industry and Competition (“DTIC”) issued a draft Transformation Fund Concept Document for public comment. The proposed Fund was first announced by the Minister of Trade, Industry and Competition (“Minister”) in January 2025 and involves raising R100 billion over 5 years for the purposes of supporting firms that are majority owned and controlled by black people as defined in the Broad-Based Black Economic Empowerment Act (“BBBEE Act”). The concept document provides that the proposed Fund will be administered through a Special Purpose Vehicle (“SPV”). The SPV will be a tax-exempt entity and a registered Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act. It will have an eight member board of directors appointed by the Minister which will include two representatives from the private sector. The Fund will be financed by the Government, public entities, donor agencies (including international organisations and development banks) and the private sector. Regarding funding from the private sector, two main sources are identified in the concept document – 1) the Equity Equivalent Investment Programme (“EEIP”) which allows the local subsidiaries of certain multinationals to score BBBEE ownership points without having an actual black shareholding. Funds are instead contributed to BBBEE initiatives approved by the DTIC. It is not clear if the DTIC will request changes to existing EEIPs to require them to contribute to the proposed Fund or whether contributions to the Fund will only be required for new EEIPs; 2) allowing firms to score Enterprise and Supplier Development (“ESD”) points for the purposes of their BBBEE rating by making a contribution to the proposed Fund. In this regard, the DTIC will amend the current Codes of Good Practice (“Codes”) issued under the BBBEE Act with regard to the measurement of a firm’s score for ESD. The concept document does not give much detail regarding the proposed amendments to the ESD provisions of the Codes. In terms of the BBBEE Act, any amendments to the Codes must be published by the Minister in the Government Gazette for public comment for at least 60 days. The current framework for measuring a firm’s ESD score in terms of the Codes involves assessing a firm’s supplier development (“SD”) and enterprise development (“ED”) contributions to firms which are at least 51% black owned and have a total annual revenue of R50 million or less (contributions to firms exceeding such threshold may be recognised for five years if they first received assistance while their annual revenue was under the threshold). A firm’s SD and ED score is measured having regard to targets based on its net profit after tax (2% for SD and 1% for ED). The key difference between SD and ED is that a SD beneficiary is an existing supplier whereas an ED beneficiary is not an existing supplier. The Codes provide that if a firm fails to score at least 40% of all the available points for SD and ED, its BBBEE rating will automatically be downgraded by one level if its total annual revenue exceeds R50 million. ESD accordingly constitutes a key part of determining a firm’s BBBEE rating. The current framework involves establishing a direct business relationship between the firm seeking ESD points and ESD beneficiaries identified by it. This has several commercial benefits for the beneficiary especially as the Codes contemplate both monetary and non-monetary SD and ED contributions like investments, loans, grants, guarantees, credit facilities, training , mentoring, discounts and other preferential terms with a view to integrating the beneficiary directly into the firm’s supply chain. The contributions are made directly to the beneficiary and generally requires significant time and resources from the firm which develops and implements the ESD program. Significantly, the beneficiary must receive the contributions during the firm’s financial year in order to contribute to the firm’s ESD score for that financial year. This incentivises the quick delivery of contributions to beneficiaries. The concept document however indicates that a firm could earn ESD points “immediately” by merely contributing to the proposed Fund. This could save the firm significant time and costs if it did not have to implement its own ESD program. The concept document is not clear on this point but states that a “participation agreement” will have to be concluded with the SPV. The terms and conditions of such agreement will have to be carefully considered especially if it seeks to impose obligations in addition to the contribution to the Fund. The concept document states that contributions to the Fund will generally be exempt in terms of section 56(1)(h) of the Income Tax Act and would qualify for a deduction in terms of section 18(A) of the Income Tax Act. There may accordingly be a tax incentive in contributing to the Fund. Compliance with the current SD and ED targets in the Codes are not obligatory and ESD points are scored on a pro rata basis having regard to whether or not a firm meets the target. This means that a firm has the flexibility to decide how much to spend on SD and ED ( bearing in mind the risk of the automatic downgrade referred to above). It is not clear from the concept document whether a firm’s contribution to the Fund may be less than the target. The concept document states that a firm may decide whether or not to contribute to the Fund ie contributions will be voluntary. Presumably a firm will be able to choose not to contribute and rather continue with its own ESD program although the concept document is not clear in this regard. Much will depend on the detail of the proposed amendments to the Codes. The current framework envisages direct business relationships between private sector firms and ESD beneficiaries. The concept document envisages interposing the SPV as a third party between the private sector and ESD beneficiaries. The SPV will collect and distribute funds and implement its own ESD initiatives. This adds complexity to the delivery of ESD contributions to beneficiaries and may adversely affect the benefits for beneficiaries of such direct business relationships. There are several existing entities and programs tasked with promoting BBBEE and supporting majority black owned and controlled business and small, medium and micro enterprises (SMMEs) including the National Empowerment Fund, the Industrial Development Corporation, the DTIC’s Black Industrialist Scheme, the Small Enterprise Development and Finance Agency (SEDFA) and the Department of Small Business Development. A key question is whether the funds earmarked for the proposed Fund should not rather be provided to existing entities and programs rather than establishing a new entity. The proposed Fund should operate in conjunction with and supplement (rather than duplicate and overlap with) existing entities and programs. The effect of the Fund on existing ESD programs being implemented by the private sector should also be carefully considered. Ultimately the Fund’s success will depend on its delivery, efficiency , credibility and good governance. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.polity.org.za/article/proposed-r100-billion-transformation-fund-will-have-significant-implications-for-broad-based-black-economic-empowerment-bbbee-regulation-in-south-africa-2025-04-23

Creamer Media | 22 April 2025 In a powerful move to advance inclusion, mobility, and employability for persons with disabilities, Engen, in partnership with the Disability Economic Empowerment Trust (DEET), has successfully equipped 200 beneficiaries across five provinces with essential life and career skills through its Job Readiness Programme. Launched in September 2024, the initiative spanned KwaZulu-Natal, Eastern Cape, North West, Limpopo, and Mpumalanga, offering 100 participants hands-on driver training and enrolling all 200 in a comprehensive job readiness programme. This included CV writing, digital skills, workplace etiquette, and interview preparation. To date, 40% of driver training participants have obtained their drivers licences through the programmes Driver Training Programme with testing ongoing.  Notably, Limpopo achieved a remarkable 95% pass rate. The programme’s success is rooted in its commitment to accessibility. Modified vehicles, assistive devices, and sign language interpreters ensured that no participant was left behind, regardless of physical or sensory challenges. “This programme has opened doors that were previously shut,” says Thabiso Phetuka, CEO of DEET. “It’s about restoring dignity, agency, and access to economic opportunity.” Engen also supplied over 30 assistive devices, further enhancing participants' mobility and independence. “This initiative reflects our commitment to creating meaningful, long-term impact,” says Olwethu Mdabula, Engen CSI Manager. “By addressing key barriers like mobility, we’re building pathways to employment and entrepreneurship.” Aligned with the UN Convention on the Rights of Persons with Disabilities and South Africa’s 2015 White Paper on Disability, the programme reinforces Engen’s role as a champion of disability inclusion and social transformation. "Our partnership with Engen provides real hope to people with disabilities who have struggled to access the job market due to a lack of skills or mobility," added Phetuka. Affirming Engen’s dedication to disability inclusion, Mdabula added: "It’s not just about non-discrimination but about creating tangible opportunities that enable people with disabilities to become active members of society.” ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/engen-and-deet-empower-persons-with-disabilities-through-life-changing-skills-programme-2025-04-22

Frik Boonzaaier | 23 April 2025 The BEE Chamber welcomes the Department of Employment and Labour’s release of the 2025 Employment Equity (EE) Regulations and sector-specific numerical targets on 14 April 2025, and says it's a step which is intended to more effectively address historical disparities experienced by designated groups (Black people, women and people with disabilities), by accelerating the pace of South African workforce transformation. The 2025 EE Regulations introduce five-year numerical targets across 18 economic sectors including engineering; financial and insurance activities; mining and quarrying; information and communication, manufacturing and construction to ensure fair representation of designated groups. “These targets should be viewed as milestones to guide employers toward equitable representation,” explained Frik Boonzaaier, Human Capital Transformation Specialist, at The BEE Chamber.  He noted that some flexibility remains for designated employers, those with 50 or more employees, to set their own annual EE targets, provided they align with the five-year sectoral targets and Economically Active Population (EAP) statistics. “Finding this balance will ensure employers can tailor their strategies to their unique workforce dynamics while contributing to national transformation objectives. The BEE Chamber sees this as an opportunity for businesses to lead by example, integrating diversity into their growth strategies.” “Since 1 January 2025, all small businesses with fewer than 50 employees, irrespective of their annual turnover, are exempt from Chapter III of the EE Act, and do not need to implement the duties of a designated employer (consultation, EE Plan, EE Reports, etc), a move designed to alleviate administrative burdens and to encourage job creation. However, these businesses must still comply with the anti-discrimination provisions under Chapter II. The BEE Chamber supports this exemption, noting it allows emerging enterprises to focus on growth while larger firms drive transformation at scale.” “Compliance is further incentivised through the recent promulgation of Section 53 of the EE Amendment Act, which mandates a Certificate of Compliance, strongly linked to the Sectoral Targets, for designated employers that want to participate in state tenders. This measure ensures that only businesses committed to transformation can access public contracts, a critical step for sectors like construction that rely heavily on government projects.” “The 2025 EE Regulations mark a significant stride toward a more representative economy. We urge businesses to view these targets as an opportunity to drive meaningful change. Many questions still exist regarding specifics of the implementation of the new Regulations. The BEE Chamber therefore encourages its clients to leverage its consultancy services to navigate these requirements seamlessly. The 2025 EE reporting season opens on 1 September 2025,” Boonzaaier concluded.   https://www.crown.co.za/modern-mining/industry-news/32389-bee-chamber-welcomes-2025-employment-equity-regulations

In the realm of economic empowerment, Broad-Based Black Economic Empowerment (B-BBEE)  stands as a cornerstone initiative aimed at redressing imbalances of the past and fostering inclusive growth. However, even with its noble intentions, there lies a persistent challenge: Fronting Practices.   Fronting Practices refer to the practice of misrepresenting the true nature of B-BBEE compliance, often undermining its objectives and perpetuating economic inequality. At its core, B-BBEE seeks to empower Black People and promote their meaningful participation in the economy. It encompasses various measures such as Ownership, Management Control, Skills Development, Enterprise and Supplier Development, and Socio-Economic Development; all aimed at broadening economic participation and socio-economic empowerment. However, Fronting Practices undermine these objectives by creating a facade of compliance while circumventing the spirit of B-BBEE and transformation initiatives.   Fronting Practices manifests in various forms, ranging from the creation of superficial empowerment structures to the exploitation of loopholes in B-BBEE legislation. One common tactic involves the establishment of so-called "front companies" or "token Black Ownership" structures, where Black individuals or entities are used as figureheads without genuine involvement or control in the business operations. In other instances, companies may engage in window-dressing tactics, such as inflating Procurement Spend with Black-owned suppliers without genuine economic empowerment outcomes.   The prevalence of Fronting Practices poses significant challenges to B-BBEE compliance  and undermines the credibility of the entire empowerment framework. It not only erodes trust between stakeholders but also perpetuates a culture of non-compliance and impunity. Moreover, Fronting Practices distort market dynamics by allowing entities to unfairly compete for business opportunities meant for genuinely empowered enterprises, thereby stifling economic transformation and exacerbating inequality.   Addressing Fronting Practices requires a multifaceted approach that combines robust enforcement mechanisms, increased transparency, and enhanced public awareness. Regulatory authorities such as the B-BBEE Commission and the Department of Trade, Industry and Competition ( the dtic ) must strengthen enforcement measures to detect and penalise instances of Fronting Practices effectively. This may involve conducting thorough investigations, imposing severe penalties on offenders, and implementing measures to deter future violations. Moreover, collaboration between government agencies, industry associations, and civil society organisations is essential to share best practices, raise awareness, and promote compliance with B-BBEE principles.   Transparency and accountability are critical in combating Fronting Practices and restoring trust in the B-BBEE framework. Companies must adopt a culture of transparency and disclosure, providing clear and accurate information about their empowerment initiatives and outcomes. This includes publishing detailed B-BBEE Scorecards, where possible, disclosing Ownership structures, and demonstrating genuine efforts towards economic empowerment. By driving transparency, companies can mitigate the risk of Fronting Practice allegations and demonstrate their commitment to genuine transformation.   Furthermore, public awareness and education play a vital role in addressing Fronting Practices and promoting compliance with B-BBEE principles. Stakeholders across the public and private sectors must engage in proactive outreach efforts to educate businesses, investors, and the general public about the importance of economic empowerment and the consequences of Fronting Practices. This may involve hosting workshops, disseminating informational materials, and leveraging digital platforms to raise awareness about B-BBEE compliance requirements and best practices.     Ultimately, Fronting Practices represents a significant challenge to B-BBEE compliance and undermines efforts to achieve meaningful economic transformation in South Africa. Addressing Fronting Practices requires a concerted effort from regulatory authorities, businesses, and civil society to strengthen enforcement measures, promote transparency, and public awareness. When we tackle Fronting Practices head-on and uphold the principles of genuine economic empowerment, we can pave the way for a more inclusive and equitable society, where every citizen can thrive.