Designated employer at 50 employees: what changed in 2025

The short answer

Since 1 January 2025 an employer with 50 or more employees is a designated employer under the Employment Equity Act, whatever its turnover. That brings consultation, an analysis, an EE plan, a s24 senior manager and annual reports, which may be filed online from 1 September to 15 January.

The short answer

From 1 January 2025, whether you are a designated employer under the Employment Equity Act depends on headcount, not turnover. An employer with 50 or more employees is designated^[1]. The Employment Equity Amendment Act 4 of 2022 deleted the old turnover test, which had also designated smaller employers whose annual turnover exceeded a threshold^[2], and that change took effect on 1 January 2025^[3].

If you employ 50 or more people, the Act's affirmative action chapter applies to you. If you employ fewer than 50, it generally does not, but the prohibition of unfair discrimination still applies to every employer^[1].

What changed and why it matters

Before 2025, the definition of a designated employer in section 1 of the Act included two limbs relevant to private employers: employers with 50 or more employees, and employers with fewer than 50 employees whose annual turnover was at or above the threshold for a small business in Schedule 4^[1]. The second limb caught many small but profitable businesses.

The 2022 Amendment Act deleted paragraph (b) of the definition^[2]. The President fixed 1 January 2025 as the date on which the Amendment Act came into operation^[3]. The practical effect is simple: count employees, not revenue.

How to count

Count all employees, not only permanent staff. Include part-time employees and fixed-term employees. Check how temporary employment services staff are treated under your arrangements, and take advice if the number is close to 50. Count at the level of the employer, which is the legal entity, not the brand or the site.

If the number fluctuates around 50, keep a monthly record. Under the 2025 Regulations, an employer that becomes designated on or after the first working day of April is only required to submit its first report in the following reporting cycle^[4]. That gives some breathing room, but it is better to plan for designation than to discover it.

What designated employers must do

The Act places a series of duties on designated employers. In outline:

Consult

A designated employer must take reasonable steps to consult and attempt to reach agreement with a representative trade union and its employees, or, if there is no representative union, with its employees or their nominated representatives^[1]. The people consulted must, taken as a whole, reflect the interests of employees across occupational levels and categories, designated groups and non-designated employees^[1]. Most employers do this through an employment equity committee.

Analyse

A designated employer must collect information and conduct an analysis of its employment policies, practices, procedures and working environment, to identify barriers to employment equity, and a profile of its workforce within each occupational level^[1].

Plan

A designated employer must prepare and implement an employment equity plan that will achieve reasonable progress towards employment equity^[1]. The Act lists what the plan must contain, including yearly objectives, affirmative action measures, numerical goals where there is under-representation, timetables, the duration of the plan, monitoring procedures, internal dispute procedures and the persons responsible^[1]. Under the original section 20, a plan may not be shorter than one year or longer than five years^[1]. The 2025 Regulations require a designated employer to retain its plan for five years after it expires^[4].

Meet sector targets

The 2022 Amendment Act inserted a new section 15A, which allows the Minister to identify national economic sectors and set sectoral numerical targets^[2]. The Minister published a Determination of Sectoral Numerical Targets in April 2025^[5]. Designated employers must take the targets for their sector into account when setting numerical goals in their plans. Find your sector and check the targets that apply to your occupational levels.

Report

Every designated employer must submit an annual report to the Director-General on the date and in the manner prescribed^[2]. The 2025 Regulations provide that reports may be submitted online from 1 September until 15 January of the following year, or by hand delivery from 1 September until the first working day of October^[4]. Employers must retain a copy of each report for five years after submission^[4].

Income differentials

When reporting, a designated employer must also submit a statement on the remuneration and benefits received in each occupational level of its workforce to the National Minimum Wage Commission^[2]. The 2025 Regulations use the EEA4 form for this statement^[4].

Assign a senior manager

Every designated employer must assign one or more senior managers to take responsibility for monitoring and implementing the plan, give them the authority and means to do so, and take reasonable steps to ensure they perform their functions^[1]. Assigning a manager does not relieve the employer of its own duties^[1].

A practical twelve-month cycle

1. January to March. Confirm headcount and designation status. Review the previous year's report and progress against the plan.
2. April to May. Update the workforce profile and the analysis. Check the sectoral targets that apply to you^[5].
3. June to July. Consult the employment equity committee on the analysis, barriers and proposed measures. Minute every meeting.
4. August. Finalise numerical goals and any amendments to the plan. Prepare the EEA2 and EEA4 information.
5. September to January. Submit the reports within the prescribed window^[4]. Keep proof of submission.
6. Ongoing. Implement the plan. Track appointments, promotions, terminations and training against the goals.

Common mistakes

• Assuming turnover still matters after 1 January 2025.
• Counting only permanent employees.
• Treating the committee as a formality and failing to consult on the analysis and plan.
• Setting numerical goals without reference to the sectoral targets.
• Missing the reporting window or failing to keep proof of submission.
• Failing to assign a senior manager in writing.

A worked example

A Cape Town engineering firm had 38 employees and a turnover above the old Schedule 4 threshold. Until the end of 2024, it was a designated employer because of turnover. From 1 January 2025, the turnover limb no longer applied^[2][3]. The firm took stock: it had 38 employees, so it was no longer designated. It decided to keep its employment equity committee as a consultative forum, to continue tracking its workforce profile and to apply the prohibition on unfair discrimination carefully in recruitment. It also set an internal alert at 45 employees so that it would be ready to prepare an analysis and plan if it grew to 50.

A second firm in the same building had 64 employees. For it, nothing changed except the details: it updated its plan to reflect its sectoral targets, confirmed that its senior manager assignment was in writing, and submitted its reports online in October.

Every employer: unfair discrimination

Designation is about the affirmative action duties in Chapter III of the Act. It does not affect the prohibition of unfair discrimination, which applies to every employer regardless of size. The Act provides that no person may unfairly discriminate, directly or indirectly, against an employee in any employment policy or practice, on one or more listed grounds, including race, gender, sex, pregnancy, ethnic or social origin, disability, religion, culture and language^[1]. Disputes about unfair discrimination must be referred within six months of the act or omission^[1].

For smaller employers, this is the part of the Act that matters day to day. Recruitment adverts, interview questions, pay decisions and promotion criteria should all be defensible on grounds that relate to the job.

Other designated employers

The definition of a designated employer also covers municipalities, organs of state (with listed exclusions) and employers designated by a collective agreement concluded under the Labour Relations Act, to the extent provided for in the agreement^[1]. If you are bound by a bargaining council agreement, check whether it designates you.

Voluntary compliance

Some employers below the threshold choose to follow parts of the process voluntarily: keeping a workforce profile, consulting staff about barriers and setting internal goals. That can strengthen a business's position in tenders and with clients that ask about transformation. It is a business decision, not a legal duty, and a smaller employer that does so should be careful not to create internal policies it cannot sustain.

Keeping the record

A designated employer's compliance file should contain the headcount record, the committee's terms of reference and minutes, the analysis, the current plan, the senior manager's written assignment, each annual report with proof of submission and the income differential statement. The 2025 Regulations require plans and reports to be kept for five years^[4]. A well-kept file is the simplest answer to an inspector's request.

Reporting when you are new to designation

An employer that crosses the threshold for the first time should start with the basics: assign the senior manager in writing^[1], set up a consultative forum that reflects the workforce^[1], and begin the analysis^[1]. The first plan and report follow from that work. The 2025 Regulations also say that a designated employer will not be assessed for compliance with its annual targets in the first reporting period in certain circumstances^[4], but the duty to consult, analyse and plan applies from designation.

Key points

• From 1 January 2025, 50 or more employees makes a private employer designated; turnover no longer counts^[1][2][3].
• Designated employers consult, analyse, plan, assign a senior manager and report every year^[1][2].
• Reports may be submitted online from 1 September to 15 January^[4].
• Check your sector's numerical targets before setting goals^[5].
• Every employer, designated or not, must avoid unfair discrimination^[1].

When to get specialist help

A consultant can confirm your designation status, run the analysis, facilitate committee meetings, draft the plan and prepare the reports. Book a LabourLink consultation well before the reporting window opens^[4]. If the Department of Employment and Labour raises a compliance concern, or an employee refers an unfair discrimination dispute, get help immediately so that the response is prepared from a complete file.

Sources

Official and primary sources, each checked on 17 October 2026. Last reviewed 17 October 2026.

1. Employment Equity Act 55 of 1998 (gov.za)
2. Employment Equity Amendment Act 4 of 2022, Government Gazette 48418 (gov.za)
3. Proclamation 231 of 2024: commencement of the Employment Equity Amendment Act on 1 January 2025, Government Gazette 51684 (gov.za)
4. Employment Equity Regulations, 2025, GoN 6125, Government Gazette 52515 (gov.za)
5. Determination of Sectoral Numerical Targets, GoN 6124, Government Gazette 52514 (gov.za)

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