Depending on the organisation’s liquidity, it may be a quick and easy resolution to settle with the Department of Labour and pay a fine.

No previous contravention – The greater of R1 500 000 or 2% of the employer’s turnover.

  1. A previous contravention in respect of the same provision. – The greater of R1 800 000 or 4% of the employer’s turnover.
  2. A previous contravention within the previous 12 months or two previous contraventions in respect of the same provision within three years. – The greater of R2 100 000 or 6% of the employer’s turnover
  3. Three previous contraventions in respect of the same provision within three years. – The greater of R2 400 000 or 8% of the employer’s turnover
  4. Four previous contraventions in respect of the same provision within three years – The greater of R2 700 000 or 10% of the employer’s turnover.

The most common question is how long it takes to comply. This is based on the instruction from the management team and how much they are willing to do. On average a normal 50-employee organisation will take approximately 7 to 14 workdays to meet basic compliance. However. this involves two weeks of 18 to 20-hour workdays, for all employees involved.

The second most common question is how much will this cost? The short answer is, that we don’t know. It depends on your organisation, and what exactly is required. We will provide the organisation with a detailed quotation based on what needs to be implemented, and how much the organisation can implement by itself.

The third most common question is the What if? We close the company, or Split the company? In terms of SECTION 61 of the Act, if the organisation make changes to avoid compliance as a designated organisation the Labour Court will view this as fraud and respond accordingly. The Managing director, Ceo and Cfo will remain personally responsible for any fines even after the company is closed.

The truth is the Employment Equity Act is a draconian-law with extreme fines and penalties, 10% of annual turnover, or R2’7mil fines per transgression with the official purpose and ability to destroy a business if it does not comply. (So if there is any chance of staying below the thresholds, to avoid becoming obligated to comply with the Employment Equity Act, then implement it at all costs.)

In terms of section 19 of the Employment Equity Act, all organisations with more than 50 employees OR with a turnover over the annual turnover threshold as below in Schedule 4 of the Employment Equity Act must comply. it also means that as a designated employer you are required to report by the legislative reporting deadline from the 1st of October until on or before the 15th of January annually.

Employers who employ less than 50 workers, but have a total annual turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of the Employment Equity Act. Employers that employ 150 or more seasonal or temporary workers. New Organisation that is, either reaching the 50 workers mark or an employer bound by a collective agreement, is appointed as a designated employer in terms of the Employment Equity Act.