As the new year has begun, recruitment agencies must prepare for significant shifts in the regulatory landscape that will impact their own operations and those of their clients. On the 1st of January 2025, amendments to South Africa’s Employment Equity Act (EEA) will come into effect, introducing changes that all employers and particularly those in recruitment should understand to remain compliant and competitive.

SECTORAL TARGETS: A GAME-CHANGER FOR EMPLOYERS

One of the most impactful amendments is the introduction of sectoral targets. The Department of Employment and Labour (DEL) has already released draft regulations outlining sector-specific targets for designated groups, with consultations and feedback processes ongoing. Once finalised, these targets will require designated employers to align their employment equity plans with sectoral goals or provide reasonable justifications for non-compliance.

Recruitment agencies play a crucial role in helping clients navigate these changes. Understanding the sectoral targets and advising clients on workforce planning will become a key value-added service. For agencies themselves, compliance with these targets may be necessary to maintain contracts with state entities.

KEY AMENDMENTS RECRUITMENT AGENCIES SHOULD NOTE:

· Redefined Designated Employers

Starting in 2025, only employers with 50 or more employees will be classified as designated employers under the affirmative action provisions of the EEA. Annual turnover will no longer be a requirement. This shift simplifies compliance requirements for smaller employers but reinforces the need for larger organisations, including many recruitment agencies to review their and their clients’ obligations.

· Broader Definition of Disabilities

The revised definition of “disabilities” includes intellectual and sensory impairments, expanding the scope of individuals covered under the EEA. Recruitment professionals must update their processes to ensure inclusivity and compliance with these broader criteria’s.

· Changes to Employment Equity Reporting

The rigid 1st October deadline for submitting employment equity reports has been replaced with more flexible timelines to be prescribed by the Minister. Agencies and their clients should stay updated on these guidelines to avoid penalties for late submissions.

· Certificate of Compliance Requirements

All employers wishing to provide goods or services to government entities must meet specific criteria to obtain a certificate of compliance. Recruitment agencies partnering with public sector clients will need to meet these criteria to maintain eligibility for government contracts. These include:

o Meeting sectoral targets or providing a valid justification for non-compliance.

o Submitting annual employment equity reports.

o Having no findings of unfair discrimination or unpaid minimum wage violations in the past 12 months.

· Additional amendments include:

o Health Professions Council will discontinue its certification of psychological assessments, thereby easing capacity limitations.

o Employers are now required to engage solely with representative trade unions, rather than individual members.

o The Minister is empowered to establish specific numerical employment equity targets, within various sector which designated employers must incorporate into their equity plans. Adherence hereto will be a critical factor in determining compliance with the Employment Equity Act.

o Income differential statements will now be directed to the National Minimum Wage Commission instead of the Employment Conditions Commission.

o Labour inspectors’ have been granted expended authority, enabling them to enforce compliance more effectively, which includes the power to require written commitments and serve compliance orders in instances of non-compliance, such as the failure to develop an equity plan.

WHAT THIS MEANS FOR RECRUITMENT AGENCIES

These legislative changes present both challenges and opportunities. Agencies will need to:

· Educate Clients: Guide clients on the implications of sectoral targets and other amendments. Offer strategic workforce planning to align with compliance requirements.

· Adapt Internal Policies: Review internal employment equity plans and ensure alignment with the new sectoral targets once they are finalised.

· Enhance Service Offerings: Expand services to include compliance audits, employee consultation facilitation, and diversity recruitment strategies.

· Monitor Regulatory Updates: Stay informed about the finalisation of sectoral targets and submission guidelines to keep both agency operations and client advisory services up to date.

PREPARING FOR THE FUTURE

While the final sectoral targets are still pending, now is the time for recruitment agencies to prepare. Conduct internal workforce analyses, consult with employees or representative trade unions, and anticipate adjustments to employment equity plans. As trusted advisors to businesses, recruitment agencies can position themselves as indispensable partners in navigating these changes. Readiness is key and agencies that adapt proactively will not only ensure compliance but also strengthen their reputation as leaders in fostering equitable and inclusive workplaces.

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Written by: Danielle Statham