Are you prepared to pay a penalty of 2% of turnover?
This is exactly what you will have to do if you contravene the Employment Equity Bill.
The Minister of Labour is ready to impose a percentage turnover for companies who do not implement employment equity.
There are tough penalties on the way for designated employers
The proposed Employment Equity Bill stipulates tough penalties for your company if:
- You meet the turnover thresholds that qualify you as a designated employer; BUT
- You are found guilty of contravening the act.
Fines start at 2% of a business's turnover for a first-time offence. They then increase to 10% of turnover if your company is found to have committed four contraventions of the same provision in three years.
You could be put out of business
Even a fine of 2% of turnover could send most businesses spiralling into debt and eventually out of business.
The Department of Labour has also undertaken to ‘name and shame’ non-compliant companies. The repercussions of this on your business can be just as detrimental as the penalty. Suppliers and customers may not want to deal with your company for fear that their link to you may lose them business with government and the public sector (guilt by association).
You can be sure that inspectors will be checking your company’s workforce profile in comparison to the national demographics to establish if there is equitable representation in your company and proper recruitment, promotion, and skills development.
They will also be scrutinising if designated employers are implementing employment equity plans and applying affirmative action.
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Author: Jonathan is the CEO of Global Business Solutions and is a nationally acclaimed consultant, lecturer, attorney and author on matters relating to Labour Law, Industrial Relations and Broad-Based Black Economic Empowerment. Jonathan is also an Arbitration and Mediation panelist, accredited Commissioner of the Commission for Conciliation, Mediation and Arbitration, member of Tokiso dispute settlement panel. |
