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Designated Employers

Which companies are classified as ‘designated employers’?

Section 1 states that a company may be deemed as a ‘designated employer’ in terms of the Employment Equity Act when the employer:

  • employs 50 or more employees,
  • employs fewer than 50 employees but has a total annual turnover that is equal to or above the applicable turn-over thresholds set out in Schedule 4 of the Act.

What are the current turnover thresholds for Employment Equity in terms of Schedule 4 of the Act?

Schedule 4 of the Act

Sector or subsector in accordance with the Standard Industrial Classification Previous Annual Threshold New Annual Threshold
Agriculture R2m R6m
Mining and Quarrying R7.5m R22.5m
Manufacturing R10m R30m
Electricity, Gas and Water R10m R30m
Construction R5m R15m
Retail and Motor Trade and Repair Services R15m R45m
Wholesale Trade, Commercial Agents and Allied Services R25m R75m
Catering, Accommodation and other Trades R5m R15m
Transport, Storage and Communications R10m R30m
Finance and Business Services R10m R30m
Community, Special and Personal Services R5m R15m

NB. It is important to note that the threshold refers to annual turnover and not to the annual profits of the company.


What is required of a designated employer?

Section 13 of the Act determines that a ‘designated employer’ has a statutory duty to undertake the following activities:

  • implement affirmative action measures for people from ‘designated groups’ in terms of the Act in order to achieve employment equity in its workplace. (“Designated groups” are defined as being black people ((African Coloureds and Indians)), women and people with disabilities. The amendments to the act excludes foreign nationals from this definition);
  • establish an Employee Representative Forum (consisting of representative trade union members or employee representatives nominated by other employees) and take reasonable steps to consult and attempt to reach agreement with employees on the following EE issues:
    • the conducting of an analysis of employment policies, practises, procedures and the working environment to identify barriers,
    • the development an Employment Equity Plan with affirmative action measures to address identified barriers to equal employment opportunities for people from ‘designated groups’,
    • the preparation and annual submission a Progress Report on the Plan and an Employment Equity Report.