The Broad-Based Black Economic Empowerment (B-BBEE) Act aims to advance economic transformation and increase the participation of black people in the South African economy. A key requirement for designated employers is submitting annual Employment Equity Reports (EERs) to the Department of Labour. This guide will provide employers with everything they need to know about submitting EERs to achieve B-BBEE compliance.
Key Takeaways:
- Employment Equity Reports are mandatory for designated employers like companies with over 50 employees.
- Submitting an Employment Equity Report can earn up to 15 points on the B-BBEE scorecard.
- Key forms to submit are the EEA2 and EEA4 by January 15 each year.
- Failing to submit an Employment Equity Report can lead to penalties and a lower B-BBEE rating.
- Properly preparing your Employment Equity Report is crucial for an efficient review and approval process.
Who Needs to Submit an Employment Equity Report?
The following designated employers are legally required to submit an annual Employment Equity Report:
- Companies with 50 or more employees
- Companies with fewer than 50 employees but an annual turnover exceeding their industry threshold as specified by the Department of Labour
- Municipalities, organs of state, and companies bound by agreements designating them as such
- Employers voluntarily complying with section 14 of the Employment Equity Act (EEA)
Table 1: Designated Employers Required to Submit an EER
| Designated Employer | Details |
|---|---|
| Companies with 50+ employees | No turnover threshold. |
| Companies with <50 employees | Must exceed specified industry turnover threshold. |
| Municipalities and organs of state | Regardless of employee numbers or turnover. |
| Voluntary compliance | Companies choosing to comply with EEA section 14. |
Why Submit an EER?
There are several important reasons for designated employers to submit an annual Employment Equity Report:
- It is a legal requirement under the EEA with penalties for non-compliance.
- It demonstrates commitment to employment equity and transformation.
- It is necessary to claim crucial points on the B-BBEE scorecard:
- Up to 15 points under the Management Control element.
- Positively impacts other elements like Skills Development and Enterprise and Supplier Development.
- Improves your overall B-BBEE rating and compliance.
In short, submitting an Employment Equity Report is mandatory for designated employers and critical for achieving B-BBEE compliance in South Africa. The B-BBEE points earned for Management Control makes it worthwhile for boosting your scorecard rating.
When is the EER Due?
The annual deadline for submitting your company’s Employment Equity Report is January 15. You must submit the report with the previous year’s employment equity data. For example, the 2023 EER covering 2022 data must be submitted by 15 January 2023.
Employment and Labour on submission of employment equity reports
Meeting this strict deadline is crucial for avoiding penalties and delays that can negatively impact your B-BBEE verification.
What Forms Must Be Submitted?
When submitting your Employment Equity Report, the main forms required include:
- EEA2 – this provides workforce profile statistics including occupation levels and demographics.
- EEA4 – this covers information on remuneration levels across race, gender, and disability.
- Along with the forms, you need proof of submission confirmation from the Department of Labour.
Consequences of Not Submitting an EER
Failing to submit a complete Employment Equity Report with the required forms and proof can lead to:
- Fines and prosecution for breaking the law.
- An automatic B-BBEE non-compliant status.
- Zero points for Management Control on the scorecard.
- A low overall B-BBEE rating.
Preparing Your EER
Follow these tips for optimally preparing your EER before submission:
- Start early, at least 2-3 months before the deadline.
- Ensure accurate workforce statistics and data.
- Cross-check that forms are fully completed.
- Have senior management review and approve.
- Follow submission guidelines carefully.
The better prepared your EER, the quicker the review and approval process to achieve B-BBEE compliance for the year ahead.
EER Review and Approval
Once submitted, the Department of Labour will review your company’s EER to verify all requirements are met. This includes:
- Meeting designated employer criteria.
- Submitting complete EEA2 and EEA4 forms.
- Providing necessary supporting documents.
- Passing data checks and quality assessments.
Upon approval, you will receive confirmation that your EER complies with the EEA. This paves the way for using the EER to earn crucial B-BBEE points.
Using Your EER for B-BBEE Points
The primary motivation for designated employers to submit an EER is earning points on the B-BBEE balanced scorecard.
Key areas where an approved EER helps earn points:
- Up to 15 points under Management Control for black representation at top management levels.
- Up to 5 points for Skills Development by showing training spend on black employees.
- Up to 4 points for Enterprise and Supplier Development through procurement from black-owned businesses.
Overall, the EER creates the foundation for optimal B-BBEE performance.
Conclusion
Submitting a complete EER by the January deadline is compulsory for designated employers in South Africa. This guide covers who needs to submit, why it is so important, steps for preparing your EER, and how to leverage it for maximum B-BBEE points. Follow the recommendations outlined to ensure smooth sailing through the EER process.
FAQs
Q: What is the deadline for EER submission each year?
A: The deadline is January 15th annually.
Q: What are the main forms to submit with the EER?
A: The EEA2 and EEA4 forms, along with proof of submission.
Q: What happens if we miss the submission deadline?
A: You risk fines, penalties, and a non-compliant B-BBEE scorecard.
Q: How long does the EER review and approval process take?
A: Typically 6-8 weeks if properly prepared and submitted.
Q: Can we earn any B-BBEE points without an approved EER?
A: No, the EER is required to earn multiple elements like Management Control.
