Monday, August 4, 2014

What's happening with EE right now?

What's happening with EE right now? 1. President Zuma signed the EE Amendment Act into law last week and it comes into being 01 August 2014. This means that all designated employers will now need to meet the new EE requirements from today, going forward. The EE amendments make provision for such things as annual reporting for all designated employers; a much greater level of detail in EE Plans and in the reporting of EE; and a positive obligation on employers to investigate and reduce income differentials – to name but a few of the 26 key changes. The penalties for non-compliance have also increased, and you'll now face penalties of up to R2,7 million or 10% of your revenue turnover! That’s a huge amount of money to shell out if you’re found wanting. And keep in mind that not having a fully compliant EE Plan carries amongst the highest penalties! 2. In February 2014, new draft EE Regulations (EEA1, EEA2 – The EE Report; EEA3, EEA4 – Income Differential Report, etc.) were published for comment. There also seems to be great confusion out there regarding these EE Regulations, especially around the way that EE statistics must be calculated. Originally, the draft regulations had provisions that required top and senior occupational levels within organisations to be compared to the national demographic data for those same levels, while other levels had to be compared to the average between the national and regional demographics – but, thankfully, the government has u-turned on that and it has been scrapped. We’ll now do EE analyses using the regional and national EAP (economically active population) demographics for all levels. One thing you can be sure of, is that once the draft EE Regulations are promulgated, they'll have a huge effect on how companies plan for, implement and report on EE – so things will only get tougher going forward. Until next time, Ilene