New employment equity rules for businesses employing more than 50 people in South Africa
The Department of Employment and Labour (DEL) has gazetted a draft Code of Good Practice on the preparation and implementation of employment equity plans for South African businesses.
The draft Code relates to the new Employment Equity laws that came into effect in 2025.
The Employment Equity Amendment Act and its accompanying two sets of Employment Equity Regulations came into effect on 1 January 2025 and 15 April 2025, respectively.
Under the law, designated employers in South Africa—businesses employing over 50 people—are required to develop plans to ensure their workforces reflect the country’s demographics at all levels.
To this end, the government, through the DEL, is empowered to set numerical demographic targets for businesses across 18 sectors.
This requires designated businesses to ensure that they have sufficient black, Indian/Asian, coloured, female, and disabled employees to meet these targets over five years.
On top of the targets, designated employers are also saddled with increased admin and burdensome compliance costs—while facing steep fines and penalties for falling foul of the laws.
One of these administrative tasks is the preparation, implementation, and monitoring of employment equity plans, which must be submitted annually between September and January.
According to the DEL, the Code of Good Practice is intended to provide guidelines to designated employers and employees on the preparation, implementation and monitoring of these plans.
It also provides guidelines to employers and employees to consider and apply appropriately to their workplace circumstances.
Notably, the department said the Code must be read in conjunction with the main Employment Equity Act and other Codes and laws.
This includes all relevant employment legislation, broad-based black economic empowerment (BBBEE) laws and the National Minimum Wage Act.
Rules businesses should follow
Broadly, the draft Code breaks down the EE plans into three phases, looking at preparation, implementation and monitoring.
In terms of preparation, the Code focuses on consultation and business analysis as the foundation for the plan.
It stresses the importance of designated employers assigning senior managers to drive the process and steer the plan, while also consulting widely with employees.
Critically, it emphasises the importance of employee consultation, including both designated and non-designated employees.
The preparation phase should be underpinned by a business analysis that assesses the degree of under-representation within the business and the various barriers to employment equity.
It also calls for a full review of all policies and practices, procedures, and the working environment as a whole.
In terms of implementation, the Code focuses on establishing a concrete roadmap for employment equity, along with measurable targets and measures to address shortfalls.
Notably, this shifts the onus onto businesses to set and maintain the targets being mandated by the laws.
It also puts on paper a business’s intentions to correct issues or eliminate identified barriers to meeting these targets.
The Code also expects businesses to allocate resources and funding to achieving the goals set out in the plan.
The final theme of the draft Code is monitoring, where employers are expected to have regular meetings to monitor and evaluate the implementation of the plan against pre-defined indicators.
Critical to this is record-keeping, where reports and outcomes need to be kept and tracked.
Businesses are expected to submit an annual report to the Director General of the DEL that reflects progress against the current Employment Equity Plan.
Across each phase, the draft Code insists on open communications between employers and employees, so that the information is accessible to them.
The full draft code is available below. The code is open to public comment for 60 days following gazettement, with the closing date for comments in late September 2026.
All public comments must be in writing and forwarded to [email protected] or [email protected].
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