First published on South Africa Today

Amendments to Employment Equity Reporting Look To Equalise Remuneration Practices

The law requires that designated employers must submit a report of how representative their companies are (across all jobs in the organisation) regarding race, gender and disability. (A designated employer employs more than 50 staff members. If a company does not have this staff complement, but their annual turnover is between R6 and R75 million – depending on the industry – the business will still be a designated employer.)

Together with the Employment Equity Report, employers are also required to submit an EEA4 report. Recently, the template for the EEA4 report was amended. “These amendments are telling,” says John Botha: Employment Equity Expert and COO of Global Business Solutions, “as these will require employers and their particular governance forums (such as remuneration committees and employment equity committees) to review and align their remuneration practices with the spirit, intent and requirements of the Employment Equity Act (EEA).”

There are three key legal provisions in EEA that need to be considered when companies are reviewing their remuneration policies:

  • Firstly, equal pay for work of equal value requires that employees – who are doing the same, similar or work of equal value – must be receive equal remuneration.
  • The second is that where there are differences in income, proactive steps must be taken to remove these.
  • Thirdly, the data which now needs to be submitted in the EEA4 now focuses on metrics such as:
  • Median and mean levels of remuneration across fixed and variable earnings, and
  • The “Gini coefficient” gap between the highest and lowest earners in an organisation.

The critical question posed by the regulations is if the organisation has a policy and plan to address these matters and whether progress to address this requirement is being made. “Employers must immediately consider these and related amendments,” concludes Botha, “and they must ensure that they align with these requirements without undermining their business sustainability requirements. If anyone has any queries about these new requirements, they are more than welcome to contact me.”