Prepare for your Annual Employment Equity Assessment

The deadline for Employment Equity Returns is upon us therefore it’s vital that employers are thoroughly informed of the processes, requirements and exceptions for businesses of all sizes.  

“Many businesses are still unaware of what an EEA2 return is and its relation to black economic empowerment,” says Keith Levenstein, CEO of EconoBEE.  “This form needs to be submitted to the Department of Labour by designated employers as set out by the Employment Equity Act.”

Levenstein advised, “It’s important to note that depending on the size of your company there are certain sections of the EEA2 return that should be completed and others that should not.”

Small employers (those with more than 50 employees but less than 150) are exempted from completing certain sections of the EEA2 return. On the other hand, large employers (those that employ more than 150 people) have to complete the entire form.  Furthermore, these large employers need to submit their first form within six months of being designated and from then on must submit annually on the first working day of October.  Small employers have twelve months to submit after designation and thereafter should submit their return on the first working day of October of every year ending with an even number.  

“With regards to black economic empowerment, the EEA2 form is submitted as proof of the company’s compliance with the Employment Equity Act (unless you are exempt from doing so).  During verification of a company’s BEE scorecard, verification agents require the EEA2 form as supporting documentation when considering the Employment Equity and Management Control elements,” advised Levenstein.  

Levenstein continued: “We find that verification agencies do not operate uniformly with some saying you lose all of your points if you do not submit your EEA2, therefore it is best to submit the form.”  

Below, EconoBEE outlines the specifications on the EEA2 return that employers should take note of:

What constitutes a designated employer?
Companies that employ 50 people or more or their annual turnover threshold is equal to or more than the amounts below:

SectorTotal annual turnover
Agriculture   R2 million
Mining and Quarrying   R7.5 million
Manufacturing    R10 million
Electricity, Gas and Water   R10 million
Construction   R5 million
Retail and Motor Trade and Repair Services   R15 million
Wholesale Trade, Commercial Agents and Allied Services   R25 million
Catering, Accommodation and other Trade   R5 million
Transport, Storage and Communications   R10 million
Finance and Business Services   R10 million
Community, Social and Personal Services   R5 million

What information is required in the EEA2?

The employer’s details are required along with a workforce profile which includes:

  • Occupational categories (total number of employees including those with disabilities)
  • Occupational levels (top management, senior management, middle management, junior management, semi-skilled and unskilled employees)
  • Core operational functions which are positions that are related to the heart of the business and could lead to profit (e.g. sales department) and support functions (e.g. accounts department).

Further to this data on workforce movement relating to recruitment, promotions (employees that were promoted in each of the occupational levels) and termination should be stipulated; clearly indicating where this is applicable to persons with disabilities.  

Large employers also need to provide information relating to all disciplinary actions that took place within the 12 months prior to the report.

Skills development and training information specifying the total number of employees within the company who underwent training, including those with disabilities should be provided.

A qualitative assessment (only applicable to larger employers) and, as of the second round of submission, a progress report are also required.

You may also like...