It’s crunch time! Get your EE house in order

At this time of the year, many companies probably think that they still have plenty of time to get their EE house in order, so to speak.

Unfortunately, the Department of Labour inspectors work year-round and they are already well into their stride with Employment Equity audits.

There is a marked increase in the number of Director-General audits this year compared to the same timeframe last year…. and a D-G audit is like having a SARS audit – it puts a huge spotlight on your business and puts your EE practices under the microscope!

One of your biggest challenges comes in terms of your EE Plans

Under the amended legislation, as a designated employer, you must, after appropriate consultations in terms of the EE Act:

Conduct all the required audits (this takes a significant amount of time if done properly – and the DoL inspectors will ask to see the evidence that these audits were done).

Prepare an EE Plan in accordance with the requirements of the Act – and there are very specific requirements that must be followed.

Report annually against progress in terms of your EE Plans. (All designated employers now have to report every year).

Prepare a successive employment equity plan six months prior to the expiry of your current plan. EE compliance levels are very low, despite EE laws being in place for almost 20 years and the

Department of Labour is growing very impatient with designated employers who are not toeing the EE line.

So, what will happen if you don’t comply with all the EE provisions?

Companies will be fined from a minimum of R1,500,000 or 2% of annual turnover to a maximum of R2,700,000 or 10% of their turnover – per incidence of non-compliance, per provision!

These steep penalties could certainly mean bankruptcy for many companies, so it really is in your company’s best interests to get compliant now. Don’t wait until it’s too late, it takes far more time than you may think to get all the legal requirements in place.

By Janine Nieuwoudt

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.  Errors and omissions excepted (E&OE)