The evolving regulatory landscape in South Africa means companies must ensure they do everything possible to maintain an equal and fair working environment.
According to Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, recent changes to the Employment Equity (EEA4) document for annual reporting will force companies to report on the vertical remuneration gap within their organisation, i.e. the difference in salary between a company’s highest and lowest paid earners.
“Essentially, government is trying to identify the extent of the wage gap at each company and whether a policy is in place to address it,” he says.
Another proposed change, which was recently presented to Parliament, deals with the definition of ‘designated employer’. Currently, this is defined as a company consisting of more than 50 employees, or with an annual turnover threshold for its industry. The proposed new definition will exclude the turnover threshold.
“This will certainly make it easier for SMMEs to operate in as they no longer need to report on employment equity requirements (EE),” says Myburgh. “However, failure to report will prevent them from being issued with a compliance certificate, without which they will not be able to apply for government tenders. Consequently, SMMEs may choose to voluntarily comply with the new requirements, especially if their continued success relies on doing business with the public sector.”
Government is also considering implementing sectoral EE targets for businesses to achieve.
“Previously, companies had to comply with the country’s demographics to achieve EE, but now every sector will have its own set of targets to achieve, which will be split between top management all the way down to unskilled workers,” Myburgh explains.
“It is not yet clear how government will determine these targets, but it will have to consider the specific skills set that exists within each sector, as some sectors require a higher set of skills than others.”
Practically speaking, EE seeks to eliminate discrimination for any reason, whether it be race, gender, sexuality, language, religion, politics, or any other arbitrary reason such as hair colour.
“Ultimately, it comes down to businesses not putting on a front but complying with EE in accordance with legislation. Failure to have the correct policies, procedures, and practices in place is a barrier to EE. Additionally, it is critically important that employees are educated on what it means to discriminate unfairly and the various grounds thereof. The financial impact of non-compliance is too significant to risk,” Myburgh concludes.
As always, CRS Technologies is available to assist clients. For more information and advice, contact [email protected]