What if a company doesn’t comply with the Employment Equity Act?

What if a company doesn't comply with the Employment Equity Act?

What if a company doesn’t comply with the Employment Equity Act?

What if a company doesn’t comply with the Employment Equity Act?

The Department of Labour has about 2000 inspectors that visit organisations to verify that they indeed do comply with the Employment Equity Act. Organisations that do not comply receive a compliance order (EEA5) and if the organisation does not comply within 7 to 21 days the executives are summoned to appear in court.

Failure To Comply

Failure to comply with the Act results in extreme penalties from R1’500’000 to R2’700’000 per contravention of the Act or up to 10% of the employer’s annual turnover. In terms of Section 61(1), If any person including the executives in the organisation obstructs, commits fraud, improperly influences another, provides or declares false information or misleads the Department of Employment and Labour, its representatives or inspector that person in terms of Section 59(3) and 60(3) is liable to an R30’000 fine for every fraudulent or contravention event.

In terms of Section 61(2), If the organisation should be complying with the Employment Equity Act but knowingly takes any measures to circumvent or prevent becoming a designated employer it constitutes Employment Equity Act fraud.

In terms of the Employment Equity Amendment, Act No. 47 of 2013: Schedule 1, the following fines may be imposed for contravening or non-compliance with the act.

Reference

Employment Equity Act 47, 2013 Schedule (1)

MAXIMUM PERMISSIBLE FINES THAT MAY BE IMPOSED FOR CONTRAVENING THIS ACT.

This Schedule sets out the maximum fine that may be imposed in terms of this Act for the contravention of certain provisions of this Act.

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Stephan du Toit

Stephan du Toit

Senior Advisor Employment Equity. Specialist in emergency Employment Equity and Labour compliance for organisations. Find more information on implementing employment equity in my other articles or visit our website to enroll for the next employment equity training course.

Are you having difficulty with employment equity? Please don't hesitate to contact me.

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