EEA
Employment Equity Act, 1998 (Act No. 55 of 1998)
Two duties in one Act: every employer must keep unfair discrimination and unequal pay out of its employment practices, and an employer of 50 or more must additionally analyse its workforce, consult on a plan, meet the numerical target set for its sector and report on it every year.
Sections
22
Duties
35
Questions
79
Assessment from
R 39 700
What it covers
This Act applies to you twice over, and the two halves have different boundaries. Chapter II binds every employer in the country, whatever its size. Section 6(1) prohibits unfair discrimination, direct or indirect, in any employment policy or practice, on nineteen named grounds and on any other arbitrary ground. There are exactly two defences in section 6(2): an affirmative action measure consistent with the purpose of the Act, and a distinction based on an inherent requirement of the job. Nothing else works. Section 6(3) makes harassment a form of unfair discrimination on any of those grounds, and section 6(4) makes a pay difference between employees doing the same work, substantially the same work or work of equal value unfair discrimination where it is based on one of them. Section 11 is what makes Chapter II expensive. Where discrimination is alleged on one of the listed grounds, it is the employer who must prove, on a balance of probabilities, that it did not happen or that it was rational, not unfair or otherwise justifiable. The complainant proves nothing. An employer that cannot produce the selection criteria, the scoring, the job evaluation or the reason for the pay difference has not discharged that onus, whatever actually happened in the room. Chapter III binds only a designated employer, which since 1 January 2025 means an employer with 50 or more employees, a municipality, an organ of state, or an employer appointed as one by a bargaining council agreement. The turnover test that used to catch smaller businesses was deleted by the Employment Equity Amendment Act 4 of 2022, which also repealed Schedule 4. If you are designated, section 13(2) gives you four duties and they run in order: consult under section 16, analyse under section 19, prepare and implement a plan under section 20, and report under section 21. Sections 23 to 27 then hang off those: the next plan before this one expires, a senior manager assigned to the plan, the notice and the report displayed where employees can read them, the records kept, and the income differential statement submitted with the report. What changed on 1 January 2025 is the standard the plan is measured against. Section 20(2A) now requires the numerical goals in your plan to comply with any sectoral target set under section 15A, and the Minister set those targets on 15 April 2025 for eighteen national economic sectors, as five year figures running to 31 August 2030 for top management, senior management, professionally qualified and skilled levels, with a 3 per cent target for people with disabilities across the whole workforce. Section 42(1)(aA) makes compliance with the sectoral target a factor in assessing you, and section 42(4) lets you raise any reasonable ground to justify a failure to comply. Section 53 is where this stops being an HR matter. An employer making an offer to an organ of state for supplies, services or a letting must attach either a certificate of compliance from the Minister or a declaration of compliance capable of being verified by the Director-General, and failure to comply is sufficient ground for the offer to be rejected or the contract cancelled. Since 1 January 2025 section 53(6) tells the Minister when a certificate may be issued: the sectoral target met or the failure justified, the section 21 report submitted, no CCMA or court finding of unfair discrimination in the previous 12 months, and no CCMA award against you for failing to pay the national minimum wage in the previous 12 months. A single discrimination award can therefore cost a year of public sector tender eligibility. Section 57 is the provision that moves a business across the 50 employee line without it noticing. A person placed with you by a temporary employment service, whose employment with you is of indefinite duration or runs for three months or longer, is deemed your employee for the purposes of Chapter III. A business of 40 own employees and 20 long placed workers is a designated employer and owes the whole of Chapter III.
Does this apply to you?
Work out which half of this Act applies to you before you answer anything, because the answer to that question changes what you owe more than any other fact about your business.
CHAPTER II APPLIES TO YOU IF YOU EMPLOY ANYBODY. Section 4(1) says Chapter II applies to all employees and employers. There is no size threshold, no qualifying period and no exemption for a small business. Sections 5, 6, 7, 8, 9 and 11 in this record, and sections 25(1), 26, 57(2) and 60, are therefore yours whether you employ two people or two thousand. Section 9 extends sections 6, 7 and 8 to applicants for employment, so your recruitment file is in scope even for people who never worked for you.
CHAPTER III APPLIES ONLY IF YOU ARE A DESIGNATED EMPLOYER. Section 12 says so. Since 1 January 2025 section 1 defines a designated employer as an employer who employs 50 or more employees, a municipality, an organ of state, or an employer bound by a collective agreement under section 23 or 31 of the Labour Relations Act which appoints it as a designated employer. That is the whole list.
The turnover test is gone. Until 31 December 2024 an employer with fewer than 50 employees was also designated if its total annual turnover reached the figure for its sector in Schedule 4. Section 1(a) of the Employment Equity Amendment Act 4 of 2022 deleted that paragraph and section 14 of the same Act repealed Schedule 4, both with effect from 1 January 2025. If you were designated only on turnover, you are not designated now, and advice or software still telling you to file an EEA2 is working from the pre 2025 Act.
COUNT YOUR EMPLOYEES THE WAY THE ACT COUNTS THEM. Section 57(1) deems a person placed with you by a temporary employment service to be your employee for the purposes of Chapter III where that person's employment with you is of indefinite duration or is for three months or longer. So the count is your own payroll plus every long placed worker on your site, and a business of 40 permanent employees using 15 brokered packers through a season is a designated employer. The count is of employees, not of full time equivalents, so part time employees count as one each.
IF YOU ARE DESIGNATED, THE DATES ARE FIXED BY REGULATION AND NOT BY YOU. Regulation 9(1) of the Employment Equity Regulations, 2025, Government Notice 6125 in Government Gazette 52515 of 15 April 2025, requires every designated employer to prepare and implement an employment equity plan for the period 1 September 2025 to 31 August 2030. An employer that became designated after 1 April 2025 prepares a plan for the remainder of that period. Regulation 10(3) allows electronic reporting from 1 September until 15 January of the following year, and regulation 10(2)(b) allows hand delivery only between 1 September and the first working day of October. An employer that becomes designated on or after the first working day of April submits its first report in the following cycle, and regulation 10(5) says it will not be assessed against its annual targets in that first report.
FIND YOUR SECTOR BEFORE YOU SET A NUMERICAL GOAL. Government Notice 6124 in Government Gazette 52514 of 15 April 2025 identifies eighteen national economic sectors for the purposes of section 15A and sets five year numerical targets for each. The eighteen are Accommodation and Food Service Activities; Administrative and Support Activities; Agriculture, Forestry and Fishing; Arts, Entertainment and Recreation; Construction; Education; Electricity, Gas, Steam and Air Conditioning Supply; Financial and Insurance Activities; Human Health and Social Work Activities; Information and Communication; Manufacturing; Mining and Quarrying; Professional, Scientific and Technical Activities; Public Administration and Defence, Compulsory Social Security; Real Estate Activities; Transportation and Storage; Water Supply, Sewerage, Waste Management and Remediation Activities; and Wholesale and Retail Trade, Repair of Motor Vehicles and Motorcycles. The notice states that the targets do not add up to 100 per cent, because they exclude white males without disabilities and foreign nationals from the workforce profile, and that an employer incurs no penalty if it shows reasonable grounds for not complying.
IF YOU BID FOR STATE WORK, SECTION 53 APPLIES WHATEVER YOUR SIZE. A non designated employer offering supplies or services to an organ of state must comply with Chapter II and attach a certificate or declaration saying so. A designated employer must comply with Chapters II and III and attach one covering both.
THIS ACT DOES NOT APPLY to members of the National Defence Force, the State Security Agency or the South African National Academy of Intelligence, by section 4(3). It does bind the State otherwise, by section 62.
Where a bargaining council collective agreement covers your sector it may appoint you a designated employer under section 1(e) even if you employ fewer than 50 people, to the extent the agreement provides. Road freight, motor, building and metal are all heavily covered, so check the agreement before you conclude Chapter III is not yours.
Where this text comes from
Transcribed 2026-10-20. Check the provision against the source before relying on it in a filing.
What non-compliance costs
This Act is priced as a share of turnover, which no other South African employment statute is, and the commercial consequence under section 53 can be larger than the fine.
Schedule 1, substituted by section 27 of the Employment Equity Amendment Act 47 of 2013, sets two scales. For contravening section 16 read with 17, or section 19, 22, 24, 25, 26 or 43(2), the maximum fine starts at R1 500 000 with no previous contravention and rises through R1 800 000, R2 100 000 and R2 400 000 to R2 700 000 for four previous contraventions of the same provision within three years. For contravening section 20, 21, 23 or 44(b), which is the plan, the report and the successive plan, the maximum is the GREATER of R1 500 000 or 2 per cent of the employer's turnover, rising to the greater of R2 700 000 or 10 per cent of turnover on the same escalation. For a business of any size the percentage limb is the one that bites.
The route to those fines is short. Section 20(7) lets the Director-General apply directly to the Labour Court for a fine where a designated employer fails to prepare or implement a plan. Section 21(4B) does the same where an employer fails to submit a report, fails to notify and give reasons for not submitting, or gives reasons that are false or invalid. Neither needs a compliance order first.
For the rest of Chapter III the sequence is a labour inspector requesting a written undertaking under section 36, a compliance order under section 37 if the undertaking is refused or broken, and then the Labour Court. Section 37 as amended now covers sections 16, 17, 19, 22, 24, 25 and 26, and section 36 as amended now includes failure to prepare a plan under section 20.
Chapter II is enforced by the person discriminated against, not by an inspector. A dispute is referred to the CCMA within six months under section 10(2), and under section 10(6)(aA) an employee alleging sexual harassment, or earning below the Basic Conditions of Employment Act section 6(3) threshold, may take it to CCMA arbitration rather than to the Labour Court. Section 50(2) lets the Labour Court order compensation, damages and any other appropriate order, and there is no cap on either figure in this Act. Section 11 puts the onus on you.
Section 53(4) is the consequence that is not money: a failure to comply with the relevant provisions of this Act is sufficient ground for the rejection of any offer to an organ of state, or for the cancellation of the agreement. Read with section 53(6), a single CCMA finding of unfair discrimination against you, or a single CCMA minimum wage award, blocks the certificate for 12 months.
Section 60 makes the employer deemed to have contravened the Act itself where an employee's contravention is brought to its attention and it fails to take the necessary steps, unless it proves it did all that was reasonably practicable to prevent the conduct. A harassment case therefore becomes the employer's own contravention through inaction.
Sections 59 and 61 create criminal offences. Breach of the confidentiality of information acquired under this Act, and obstructing a person exercising a power under it, undue influence, and knowingly giving false information, are offences carrying a fine or imprisonment. Regulation 24 of the Employment Equity Regulations, 2025 records that providing false information to obtain a certificate of compliance, or altering one, is a criminal offence.
What the assessment covers
The assessment works through 79 questions across 35 duties, scored out of 504. Each answer generates the specific actions needed to close or prove that duty, and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on EEA
Run the assessment, get your score, and get the exact list of what to fix, with the evidence trail an auditor will ask for.