FIA’s Ongoing Advocacy: Employment Equity Regulatory Impact & Next Steps

With new Employment Equity Regulations in effect as of April 2025, read on to see what trade associations have been doing with regards to Employment Equity on behalf of business – and a break-down of what your business needs to be aware of right now.

As a trade association, the Financial Intermediaries Association (FIA) empowers the industry to speak with one unified voice. In addition, it is committed to keeping members up to speed with industry developments and equipped with the knowledge to respond to them. Here’s a summary of the recent regulations around Employment Equity – and how they impact intermediary businesses.

Final Employment Equity Regulations published: effective 10 April 2025

Despite substantial lobbying efforts by the FIA and an opportunity to present sub-sector targets for the intermediary sector, the Minister of Employment and Labour published the final targets for all sectors on 15 April 2025, with numbers remaining unchanged from the February 2025 version. Both the final sectoral numerical targets and corresponding Regulations came into effect on 10 April 2025.

The FIA is currently engaging with other trade associations including the Association for Savings and Investment South Africa (ASISA), the Banking Association of South Africa (BASA), and the South African Insurance Association (SAIA) to discuss views and potential next steps on this critical matter affecting our sector.

Financial sector numerical targets now legally binding

The targets applicable to the Financial and Insurance Activities sector (as identified by the Department of Employment & Labour (DoEL)) under which FIA members fall are as follows:

What you need to know

The Employment Equity (EE) Regulations 2025, published on 15 April 2025, repeal the previous 2014 Regulations and provide updated frameworks for implementing the Employment Equity Act. Key aspects include:

1. Equal pay for work of equal value
   The Regulations establish a two-step process for addressing remuneration disparities. Factors that may justify differentiation in terms and conditions include seniority, qualifications, performance, and market value.
   

2. Employment equity plans: critical timeframes
   Mandatory five-year planning period:
   

• • Designated employers (those with 50 or more employees) must prepare and implement an EE Plan for the period from 1 September 2025 until 31 August 2030.
  • New designated employers (becoming designated after 1 April 2025) must prepare plans for the remainder of the period until 31 August 2030.
    

3. Target setting requirements
   When developing EE Plans and setting annual numerical targets, designated employers must consider:
   

• • Their current workforce profile
  • The relevant 5-year sectoral numerical targets (as detailed above)
  • The applicable Economically Active Population (EAP) demographics

Additional factors that may be considered include:

• • Job inherent requirements
  • The pool of suitably qualified persons
  • Formal qualifications, prior learning, and relevant experience
  • Workforce turnover and natural attrition rates
  • Recruitment and promotional trends

Important Note: Annual EE targets must be set for all designated groups in each of the four upper occupational levels. Employers must avoid perpetuating over-representation of any group if their representation exceeds the applicable EAP. Numerical goals and targets must also be set for semi-skilled and unskilled occupational levels.

4. Sector compliance and assessment
   If operating in multiple sectors, employers should apply targets for the sector in which the majority of their employees are engaged.Employers will be assessed against their annual targets toward meeting the five-year sectoral targets. No penalties will apply if reasonable grounds exist to justify failure to comply with targets, but employers must retain their EE Plan for five years after its expiry.

5. Reporting requirements
   Annual reporting will be required using the prescribed forms as provided for by the DoEL. The submission period will be:
   

• • 1 September to 15 January for online submissions
  • 1 September to first working day of October for hand deliveryPublic companies will be required to publish a summary of their EE report in annual financial reports

6. State contracts and compliance certificates
   Designated employers seeking to do business with organs of state must obtain an EE Compliance Certificate confirming compliance with relevant chapters of the Act and the National Minimum Wage Act. Both designated and non-designated employers must confirm that the Commission for Conciliation, Mediation and Arbitration (CCMA) or a court has not issued an award against them in the previous 12 months for breaching the prohibition on unfair discrimination or for failing to pay the minimum wage.
   
   Background: FIA’s ongoing advocacy
   Since 2019, when the draft Employment Equity Amendment Bill was introduced, the FIA has been actively engaging with the DoEL regarding proposed employment equity targets. In November 2024, the president proclaimed several key sections of the Act, which came into effect on 1 January 2025.Our analysis revealed that the intermediary sub-sector would require a significant acceleration to achieve the proposed five-year targets.
   
   We’ve consistently raised key concerns including:
   

1. 1. The exponential increase in targets compared to earlier proposals
   2. The need for differentiated sub-sector targets within financial services
   3. The gap between sector demographics of suitably qualified employees and the National Economically Active Population
   4. Insufficient guidance on regulatory enforcement
   5. Vague criteria for “reasonable and justifiable grounds” for compliance assessment

Next steps for members

All designated employers in our sector must now:

1. 1. Review your current employment equity status against these new targets
   2. Complete a workforce analysis using the prescribed form for employee declarations
   3. Prepare to develop your Employment Equity Plan for the 2025-2030 period using the required template
   4. Assess gaps and develop strategies to meet the requirements by 2030
   5. Be prepared for the reporting period beginning 1 September 2025

The FIA fully supports meaningful transformation while acknowledging the unique challenges faced by intermediaries. We will continue to engage with authorities and keep members informed as this critical process unfolds.