EMPLOYMENT EQUITY: Racial classification - What are employers to do?

Dear employer

NEASA and Sakeliga’s urgent legal challenge against the Employment Equity quotas and accompanying administrative regulations was heard on Friday, 15 August 2025.

However, while awaiting judgement in the matter, 1 September is approaching swiftly, and employers need to know how to navigate the current Employment Equity (EE) requirements for purposes of EE-planning and reporting, as being found to be non-compliant carries great operational and financial risks for employers.

Here is what all employers should know and consider:

1. The classification of employees on the EEA1 form is the start of all EE reports, in order to create a workplace profile illustrating the current racial, gender, and disability composition of the employer’s workforce.

   
   

2. The EE regulations place no legal obligation on employees to racially classify themselves on the form. Thus, employers may not take disciplinary action against employees who sign the form, but refuse to self-classify with regards to their race or disability.

   
   

3. In the event of employees refusing to classify themselves when completing the EEA1 form, or do so ‘inaccurately’, the EE regulations require the employer to then racially classify its employees.

   
   

4. Although there are no criteria or guidelines on how to racially classify individuals, effectively rendering the performance of classification impossible, employers may use historical or current data in an effort to classify employees (previous EEA1 forms or any other information the employer can use to classify employees).

NEASA therefore advises the following with regards to the remainder of EE planning and reporting:

1. Employers should add a condition on all EEA1 forms that they cannot be held accountable for the classification performed on the form, as there are no criteria or guidelines according to which the classification can be done.

   
   

2. Employers should add a condition to their EEA12 form that ‘historical and current data’ has been used to classify employees and that they cannot accept responsibility for the racial classification of employees.

   
   

3. Employers should set targets for years 1-4 in line with actual business realities - it is crucial that employers do not set unrealistic targets simply to try and comply with arbitrary 5-year targets.

   
   

4. Employers should add a condition on the EEA13 form that the 5-year targets are only inserted due to the obligatory nature of the EEA and the regulations, and that the targets cannot realistically be met.

Racial classification is the policy of the state and NEASA will continue to fight the cascading thereof unto employers.

However, employers who completely ignore the current regulations and targets, and refuse to report on EE, risk receiving enforcement notices, fines (of up to 10% of annual turnover), and not being able to obtain a compliance certificate. Without a compliance certificate, many employers may lose cardinal contracts and face being disqualified from contracting with the state.

NEASA strongly advises employers to, immediately after they have completed their online EE reporting, send this letter on their company letterhead to all of the following email addresses of the Department of Employment and Labour and also forward it to NEASA ( schalk@neasa.co.za ):

precious.mdlokovana@labour.gov.za ;

Welile.Dlwengu@labour.gov.za ;

ntsoakiM@labour.gov.za ;

Niresh.Singh@labour.gov.za ;

For more information, guidance and risk-mitigating EE assistance, please contact NEASA by calling 012 332 5350 or send an email to schalk@neasa.co.za.

For more information

NEASA Media Department

media@neasa.co.za

NEASA ... the only labour law specialist an employer will ever need.