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Gearing up for Equity Reporting – What not to do

October 22, 2019

It is that time of the year for Employment Equity reports submissions. The Director General from the Department of Labour is expecting all Designated Employers to submit their reports on the transformation that is taking place in their respective organisations. Like everything else that is legislation, there are deadlines which you as a designated employer need to stick to, and in this instance, you have from 1 October 2019 to 15 January 2020 to submit your reports online.

 

Remember, non-submissions lead to non-compliance which could potentially lead to a minimum fine of R 1 500 000 or 2% of the employers turnover (whichever is the greater) depending on the type and number of repeated contraventions. So why put yourself and the finances of your organization at risk when you can avoid all the drama that will lead to the penalty. In this article, we will give you hints on “What Not to Do” leading up to the Equity Reports.

 

  • Do not report on an expired/non-existent EE Plan

 

Although it may seem like the easiest and quickest way out of non-compliance “danger”, never submit a report on an Employment Equity plan that has either expired or does not exist. The EEA2 and EEA4 that you will submit is to track the level of progress of the organisation’s compliance towards the Employment Equity Act.  The reports should refer to the Employment Equity plan of the organization, the identified barriers and affirmative action measures implemented (if any) and then its numerical goals and targets. Not having a valid successive EE Plan approved before the old plan expires could leave one non-compliant with Section 23 which, in turn, could potentially lead to the minimum fine as mentioned above.

 

  • Do not ignore the steps leading to Compliance

 

In the previous paragraph we expressed the importance of the Employment Equity plan as the tool used for the reports, but what we did not mention are the steps leading up to the approval and sign off on the EE reports. Compliance can be seen for some as a tick box exercise, although the main purpose for Employment Equity is transformation, there are steps that are involved in ensuring true transformation in an organization. These steps are as follows:

 

  • S24 Manager: Appoint a Senior Manager who will act as the Section 24 Manager/ Employment Equity Manager.

  • Committee Forum Nominations: Ensure a fully representative committee has been appointed to drive the process.

  • S19 Analysis: Prepare a Section 19 Analysis to assess the under/ over representation in each occupational level and the barriers inhibiting compliance with the EE Act.

  • S20 EE Plan: Prepare, review, approve and sign off on the Employment Equity plan with the S24 Manager, committee members and Top Management. Now you have a plan, which is being monitored on a quarterly basis with the EE Committee.

  • S21 Reports: You are ready for the preparation and submission of your EEA2 & EEA4 reports. Once drafted, ensure that consultation has taken place with all relevant stakeholders before the reports are forwarded to the CEO for signature. Once obtained, proceed to submit the reports online on the Department of Labour’s online reporting system. The employer should retain the signed original copy of the reports, the EE System generated print outs of the EE reports, as well as the acknowledgement of submission.  

 

  • Do not continue with the EE report submission without consulting and receiving a sign-off from the Employment Equity Committee

 

Consultation is a crucial element of the reporting period. You cannot submit a report without consulting with the committee members who will have to sign off on the accuracy of the data before you send it to the CEO for a final sign off. In each consultation with the committee members, ensure proof of the same is kept in place by means of an agenda, attendance register and minutes of the meeting. Section 17 of the Employment Equity Act covers the matters for consultation. The section requires a designated employer to consult with the relevant parties on:

 

  1. The conduct of the Analysis referred to in Section 19;

  2. The preparation and implementation of the Employment Equity Plan referred to in Section 20; and

  3. The Reports referred to in Section 21.

 

So, as an element of gearing up to the submission of the EE reports consult with the relevant stakeholders on all matters listed above.

 

  • Do not wait till the last minute

 

A bad human habit is procrastination towards preparation and submission of the Employment Equity reports. Remember, you are reporting on real and actual data. Salaries are involved in this process. If you do not continuously update your data in preparation for the submission, then you are setting yourself up for failure. Ensure you have generated and filed all the necessary supporting documentation (such as the S19 – Analysis, S20 - EE Plan, proof of consultation, committee appointment letters, letter of appointed S24 manager.

 

Equity reporting can be a breeze if done right. Make sure that you avoid what not to do, and put your focus on compliance and transformation and you will be geared up for the submission period ahead.

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