Unpacking the final employment equity sector targets in South Africa
By Melissa Cogger and Talita Laubscher
On 15 April 2025, the Minister of Employment and Labour published the 'Determination of Sectoral Numerical Targets' (Final Sector Target Regulations) and the 'Employment Equity Regulations, 2025' (General Administrative EE Regulations), which repeal the Employment Equity Regulations, 2014 (collectively, the 2025 EEA Regulations).
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
The 2025 EEA Regulations are published, following the Employment Equity Amendment Act, 2022 (Amendment Act) coming into effect on 1 January 2025, and the purported consultations that took place between the Department of Employment and Labour (DoEL) and representatives of various sectors.
In the Final Sector Target Regulations, the Minister has identified 18 national economic sectors and set numerical targets for each sector. The ultimate purpose of these sector targets is to ensure the equitable representation of suitably qualified people from designated groups.
In terms of section 20(2A) of the Employment Equity Act, 1998 (EEA) the numerical goals set by an employer must comply with any sector target that applies to that employer and is, in terms of section 42(1)(aA), one of the measures that is considered in the assessment of compliance.
Further, the Minister may only issue a certificate of compliance in terms of section 53 of the EEA if the Minister is satisfied that, among other things, the employer has complied with a sector target that applies to that employer, and if it did not, there were justifiable reasons for non-compliance.
The enforcement of these sector targets will have significant impact on designated employers and their ability to do business with the State.
Further, fines and penalties may apply for non-compliance with sector targets unless a justifiable reason exists for such non-compliance.
History behind the targets
The timeline and process leading to the finalisation of the sectoral targets involved several stages, as set out below:
Draft 2018 EEA Regulations). These 18 sectors have remained unchanged, and are based on the broad categorisation in the Standard Industrial Classification Codes. Following the tabling of the Employment Equity Amendment Bill in Parliament, various meetings were held with stakeholders during the period from 2019 to 2022 regarding the proposed sector targets, which were initially based on the sector charters published under the Broad-Based Black Economic Empowerment Act, 2003 (BBBEE Act). The President only signed the Employment Equity Amendment Bill into law on 6 April 2023. The promulgation and coming into effect of the Amendment Act would be on a later date, which we now know to be 1 January 2025. Draft targets were published for public comment on 12 May 2023 (2023 Draft Sector Targets) as well as on 1 February 2024 (2024 Draft Sector Targets). Such publication took place even though the Amendment Act had not yet come into effect. The Amendment Act came into effect on 1 January 2025, and section 15A of the EEA empowers the Minister (following a multi-stage process of consultation) to set sector targets. During February 2025, the DoEL conducted virtual meetings with stakeholders in the 18 sectors and invited written representations within an expedited timeframe on new proposed draft targets (2025 Draft Targets). These 2025 Draft Targets were not published for public comment. Following the virtual meetings, and during February and March 2025 various stakeholders requested and held bilateral engagements with the DoEL as a means to discuss the rationale underlying the 2025 Draft Targets, as well as the rationale pertaining to the identification of the sectors. The sectors had remained unchanged since the sectors were first identified in the Draft 2018 EEA regulations, despite representations by various organisations that these were over-broad and did not take into account the unique circumstances of sub-sectors. Finally, the sector targets were published in final form on 15 April 2025 (Final Sector Targets), with no further period for public comment provided, and without prior publication of these Final Sector Targets in draft form.
18 sectors were identified by the DoEL on 21 September 2018 through the publication of draft regulations (). These 18 sectors have remained unchanged, and are based on the broad categorisation in the Standard Industrial Classification Codes.
As with the 2024 Draft Sector Targets, the Final Sector Targets are set for males and females from 'designated groups' generally and are not broken down further per population group.
Further, and as previously recorded in the 2024 Draft Sector Targets, the five-year sector targets are not intended to add up to 100%; as the sector numerical target excludes white males with no disabilities and foreign nationals as part of the workforce profile.
When determining annual employment equity targets towards achieving the five-year sector numerical targets, a designated employer must set numerical targets for all designated groups in each of the four upper occupational levels in relation to the applicable sector targets and Economically Active Population (EAP), and for persons with disabilities.
The General Administrative EE Regulations state that the manner in which designated employers must take the sector targets into account and apply the affirmative action measures is set out in the EEA, the General Administrative EE Regulations and the codes of good practice issued under the EEA.
Comparison of the 2024 Draft Sector Targets and the Final Sector Targets
In comparing the 2024 Draft Sector Targets and the Final Sector Targets, the following is notable:
Overall, the Final Sector Targets are significantly higher than the 2024 Draft Sector targets, with significant increases particularly for females in the designated groups. For instance, the target for females in senior management in the Finance and Insurance sector has increased by 21.3% when compared to the 2024 Draft Sector Targets. Targets set for females in senior management have similarly significantly increased in the Professional, Scientific and Technical Activities sector by 23.1%. Conversely, there have been some decreases in the targets for males in the designated groups.
The target for people with disabilities has been increased from 2% to 3% across all sectors.
Some of the principles agreed to between the South African Government and Solidarity trade union during 2023, which were previously included in the Draft 2024 Targets are absent in the 2025 EEA Regulations. For example, the 2025 EEA Regulations do not explicitly contain the principle " No employment termination of any kind may be effected as a consequence of affirmative action ." The principle that ' affirmative action shall be applied in a nuanced way ' is also missing from the 2025 EEA Regulations, however the regulations do outline guidelines for implementing affirmative action.
." The principle that ' ' is also missing from the 2025 EEA Regulations, however the regulations do outline guidelines for implementing affirmative action. Unlike the 2024 Draft Sector Targets, the DoEL has not explained in the Final Sector Targets what factors it took into account when setting the five-year sector targets. For example, it does not refer to the latest workforce profile statistics, the EAP, the various sector codes published under the BBBEE Act, or the unique sector dynamics.
Similar to the 2025 Draft Sector Targets, guidance is provided on the over-representation of any particular group. The 2025 General Administrative EE Regulations discourage designated employers from perpetuating the over-representation of any group if their representation exceeds the applicable EAP in a particular occupational level.
Further information is provided in circumstances where a designated employer exceeds the sector target. For example, if a designated employer has exceeded the numerical target set for a particular designated group at an occupational level, it should continue to set targets that maintain compliance with the EAP. There is no longer a prohibition on 'regression' in a particular race/gender group, which was contained in the Draft 2024 Sector Targets.
It is possible for designated employers that operate in more than one province to adopt multiple provincial EAPs, taking into account the nature of their operations and geographical area. This was not previously permitted in the Draft 2024 regulations.
Rationale for revised targets
For various sectors, the Final Sector Targets are the same as those targets shared by the DoEL during the virtual meetings held in February 2025 and are unchanged despite representations and bilateral engagements. Importantly, those draft targets shared in February 2025 were not published in the Government Gazette for public comment.
The DoEL explained in the meetings that the 2025 Draft Targets were based on the feedback received in the prior public participation process, the latest workforce profile statistics and sector dynamics.
The DoEL indicated that the rationale for the change in draft targets was due to various sectors comparing well and exceeding the 2024 Draft Sector Targets in the last reporting period, which appears to explain the markedly increased and different Final Sector Targets.
During engagements and in some of the bilateral engagements, the DoEL further explained its rationale and 'formulae'. The DoEL considered the workforce profiles of the various sectors for 2023 and 2024. It then set the target for the top four occupational levels at 6%, 7%, 8% and 9% respectively. This appears to be based on the DoEL's view that these are appropriate targets.
The Final Sector Targets therefore do not appear to have been formulated on any scientific or empirical basis. The challenge arises when the workforce profiles of subsectors are considered. In some instances, the targets are then much higher than the 6%-9% principle applied by the DoEL, which makes compliance with the sector targets a challenge for these subsectors.
Some comfort for designated employers
Whilst section 20(2A) contemplates peremptory compliance with the Final Sector Targets when setting numerical goals, comfort should be taken in the well-established principles in employment equity law that have been interpreted and developed by our courts.
In this regard, section 15(3) explicitly states that affirmative action measures include preferential treatment and numerical goals, but exclude quotas, and that there should not be absolute barriers to the appointment or promotion of over-represented groups.
Regard should also be had to the justifiable reasons for non-compliance which are repeated in the General Administrative EE Regulations, which remain unchanged from the Draft 2024 Sector Targets. Bowmans Partner Talita Laubscher
Melissa Cogger and Talita Laubscher are partners at Bowmans.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
6 hours ago
- IOL News
Employer groups seek urgent interdict against Employment Equity regulations
The Department of Employment and Labour is forging ahead with the implementation of the Employment Equity Amendment Act. Image: Leon Lestrade/ Independent Newspapers The National Employers' Association of South Africa (Neasa) and Sakeliga have officially notified the Minister of Employment and Labour, Dr Nomakhosazana Meth, of their intent to seek an urgent interdict against the contentious Employment Equity (EE) regulations. This comes after the department published two sets of EE Regulations on 15 April - the General Administrative Regulations, and Regulations on Sector Numerical EE Targets - following the commencement of the Employment Equity Amendment Act, No. 4 of 2022, on 1 January 2025. The proposed regulations mandate employers to adhere to strict hiring quotas based on race, sex, and disability, with penalties for non-compliance reaching up to 10% of a company's turnover. Section 15(A) of the Equity Employment Amendment Act empowers the minister to set numerical targets. According to the Act, the Minister may, after consulting the relevant sectors and with the advice of the Commission for Employment Equity (CEE), for the purpose of ensuring the equitable representation of suitably qualified people from the designated groups at all occupational levels in the workforce, by notice in the Government Gazette set numerical targets for any national economic sector identified in terms of subsection (1). Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Neasa on Wednesday said the urgency of this interdict stemmed from concerns voiced by the associations about the potential for these regulations to inflict irreparable harm on both public and private sectors. Neasa and Sakeliga argue that the minister's plan risks the allocation of resources ineffectively in a futile attempt to meet what they describe as 'impossible' compliance requirements. Under the proposed framework, companies would be required to categorise themselves into one of 18 economic sectors and adjust their workforce composition according to a series of demographic quotas. These quotas, referred to as 'numerical sectoral targets,' highlight a drastic shift in hiring practices, where businesses are instructed to limit appointments or promotions of employees from so-called over-represented groups, which includes many white male staff members. The end goal of these targets is to ensure that every single designated business (50 or more employees) in South Africa, regardless of industry, has a workforce that is representative of the racial and gender demographic composition of the country. The 2025 CEE Annual Report shows that at Top Management, the White population representation at 61.1% is approximately eight times their Economically Active Population (EAP), and the Indian population representation at 11.9% is more than four times their EAP at the Top Management level. In contrast, said the report, the African population representation is at 18.0%, which is approximately four times below their EAP, and the Coloured population representation at 6.2% is below their EAP at this occupational level. The CEE Report concludes that the lack of equitable representation at the Top Management level does not bode well for the future sustainable economic growth of the country and the representation of the demographic population distribution in the workplace in terms of population groups, gender, and disability. The Report said that at the Senior Management level, the picture remains appalling for the Africans, with the White and Indian Population representation remaining significantly higher than their EAP. However, critics of the regulations, including Neasa and Sakeliga, maintain that the measures contravene established constitutional rights and impose unachievable demands on employers. The economic repercussions, they argue, could be dire, potentially leading to significant job losses and overwhelming legal uncertainties that would disrupt business operations across the board. "The regulations and the Employment Equity Act (as amended in 2023) establish unlawful, unconstitutional, and impossible demands. Their consequence would be severe financial harm to businesses and extensive social harm through economic disruption, increased unemployment, and legal uncertanty," Neasa said. "We informed the minister that, in addition to our urgent application against the 2025 administrative regulations and sectoral targets, we also intend to challenge the Employment Equity Act on additional grounds."
IOL News
6 days ago
- IOL News
Employers gain flexibility in choosing EAP demographics for employment equity plans"
The Department of Employment and Labour is forging ahead with the implementation of the Employment Equity Amendment Act. Image: Leon Lestrade/ Independent Newspapers EMPLOYERS will have the option to use the applicable national or regional Economically Active Population (EAP) population as an instrument when developing employment equity (EE) plans. At a recent EE workshop held in Sandton, Department of Employment and Labour deputy director, Masilo Lefika said employers will have this option when developing EE Plans and setting annual numerical targets in their workplaces. He added that when developing EE Plans and setting annual numerical targets in their workplaces in terms of legislation, designated employers must take into account the workforce profile, the relevant five-year sectoral numerical targets, and the applicable EAP. 'The five-year sectoral numerical targets are key milestones towards achieving the equitable representation of the different designated groups within the four upper occupational levels in an employer's workforce in relation to the demographics of the applicable EAP, and for persons with disabilities,' said Lefika. This comes as the Department is forging ahead with legislative amendments to the Employment Equity Act (EEA). These amendments have their origins in 2019, when the Department, in collaboration with the Commission for Employment Equity (CEE), began sector-specific engagements aimed at setting employment equity (EE) targets. The goal was to accelerate transformation in the workplace. These efforts culminated in the Employment Equity Amendment Act No. 4 of 2022, which officially came into effect on January 1, 2025. However the changes have been met with mixed reactions as the DA has taken government to court to challenge the amendments, while others have raised concerns about applying national targets at the expense of regional demographics. According to Lefika, a designated employer will incur "no penalty or any form of disadvantage if there are reasonable grounds to justify its failure to comply with any target". Trade union federation Cosatu welcomed the option for employers to choose which demographics to apply when setting their targets. 'Cosatu engaged with the Department of Employment and Labour extensively on the 2023 amendments to the Employment Equity Act at Nedlac as well as with Parliament. We support these amendments, in particular the provisions recognising regional demographic diversity and enabling employers to utilise them or national demographics depending on their own footprint as an employer. This is critical as the demographics of Limpopo differ widely from those of the Western and Northern Cape and those differ significantly from KwaZulu-Natal. 'Enabling employers to utilise regional demographics is important to ensure local workers enjoy full worker opportunities and also to ensure workplaces represent South Africa's full diversity. This is especially important for provinces like the Western and Northern Cape where coloured workers are the largest demographic group and similarly in provinces like Gauteng and KZN. Employment equity includes all South Africans, of all racial, gender and disability categories,' Cosatu Parliamentary Coordinator, Matthew Parks said. The National Coloured Congress (NCC), which had called to meet with minister Nomakhosazana Meth over the issue, added that without proper consideration of provincial demographics, it risks the further marginalising of Coloured communities. 'The Constitutional Court has ruled you can't implement national demographics, regionally. All the labour department is doing is making it easier for businesses with vested interests to discriminate. As the custodian of employment equity, the labour department should do its job,' NCC leader, Fadiel Adams said. Cape Times National Coloured Congress (NCC) leader Fadiel Adams. Image: Supplied
IOL News
02-06-2025
- IOL News
Preparing for new employment equity targets in South Africa's financial sector
Explore the recent amendments to South Africa's Employment Equity Act and discover how financial institutions must adapt to new sector-specific targets to ensure compliance and drive transformation. Image: Freepik The transformation imperative in South Africa's financial services sector has reached a critical juncture with the recent amendments to the Employment Equity Act 55 of 1998 (EEA), which came into effect on 15 April 2025. These legislative changes signal a transition from a discretionary compliance model to a more prescriptive and measurable approach. Employers in the financial services sector are now required to actively drive change through clearly defined numerical targets and strategic employment equity planning. This is particularly important given the slow pace of transformation across all sectors, including the financial services sector. The sector faces challenges such as the underrepresentation of historically disadvantaged individuals in executive roles, skill shortages, and complex corporate structures. As a result, the financial services sector is under increased pressure to demonstrate concrete transformation outcomes. Sector-specific targets: What employers in the financial services sector must achieve The key driver behind these heightened obligations is the introduction of section 15A into the EEA. This provision grants the Minister of Employment and Labour the authority to determine sector-specific numerical targets applicable to designated employers. The amendments introduce five-year sectoral targets tailored to, amongst other sectors, the financial and insurance sector. Designated employers operating within this sector are required to incorporate these into their Employment Equity Plans (EEPs). For the financial and insurance sector specifically, the sectoral targets require that 63.1% of top management positions be held by members of designated groups. Of these, 27.8% should be occupied by males from designated groups, and 35.3% by females from those groups. At senior management level, the target increases to 77.0%, with 31.7% allocated to males and 45.3% to females within designated groups. For the professionally qualified and middle management category, the target is set at 86.8%, broken down into 40.7% male and 46.1% female representation among designated groups. For skilled technical positions, 95.6% of these are expected to be held by designated groups, comprising 49.5% male and 46.1% female representation. In addition to these occupational level targets, there is a universal requirement across all levels that at least 3% of positions be filled by persons with disabilities. These targets are not merely aspirational, they are enforceable. Employers are expected to report progress annually, and a failure to meet these thresholds may result in scrutiny, penalties, or loss of access to state contracts. While the legislation allows employers to justify non-compliance with sectoral targets, these justifications will be rigorously assessed. Acceptable grounds may include a lack of suitably qualified candidates from designated groups, limited promotion or recruitment opportunities, the impact of business transfers, mergers, CCMA awards, court orders, or adverse economic conditions. Importantly, these reasons must be thoroughly documented. The onus is on the employer to prove their validity, and unsupported or vague justifications are unlikely to be accepted. Therefore, employers must maintain detailed records and internal analyses to substantiate any departure from their EEP commitments. For effective implementation, organisations must strengthen their internal employment equity structures. This includes training line managers and employment equity forum representatives, particularly those involved in recruitment and promotion decisions. These forums must be empowered to act as transformation champions within the business. Additionally, employers should upgrade administrative processes to support accurate data collection, timely reporting, and robust monitoring. Record-keeping is particularly critical where employers rely on justifications for not meeting targets.
