Draft Reviewed Code of Good Practice on the Preparation and Implementation of the Employment Equity Plan

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Draft Reviewed Code of Good Practice on the Preparation and Implementation of the Employment Equity Plan

• 18 August 2026
• Law
• South African Accounting Academy

Summary:
The Department of Employment and Labour has published the Draft Reviewed Code of Good Practice on the Preparation and Implementation and Monitoring of the Employment Equity (EE) Plan, and has invited comments.

Article:

The Draft Reviewed Code aligns corporate compliance frameworks with the mandatory legislative shifts introduced under the Employment Equity Amendment Act.

This Code applies strictly to all "designated employers" required by the EEA to implement affirmative action measures. The threshold definitions include:

• Employers with 50 or more employees;
• Organs of state, or employers with fewer than 50 employees who are bound by specific collective agreements under Section 23 or 31 of the Labour Relations Act (LRA).

The draft Code introduces several changes, of which the following are the most significant:

• Integration of sectoral numerical targets: The single most consequential change is the integration of the mandatory five-year sectoral employment equity target regime under section 15A of the Employment Equity Amendment Act 4 of 2022. Employers must identify their applicable economic sector via the Minister’s section 15A notice and form EEA17, set numerical goals and annual targets at semi-skilled and unskilled levels under section 20(2), avoid perpetuating over-representation, and continue to target the economically active population (EAP) even where sector targets are already exceeded. The purpose is to align the Draft Code with the relevant EEA amendments.
• Reporting compliance linked to section 53(2) certificate: No certificate of compliance may be issued under section 53(2) unless a compliant report was submitted in the preceding year, with a first year grace period for newly designated employers.
• Tightened governance obligations: The draft imposes a duty to begin preparing an EE Plan as soon as an employer becomes designated, requires the assignment of accountable senior managers at the monitoring stage, and mandates that monitoring progress reports be discussed in the consultative forum.
• New definitions section: A formal definitions section is included and imports the statutory “designated employer” threshold (50 or more employees, or 1–49 employees for organs of state or employers bound by a section 23 or 31 LRA collective agreement).
• Expanded workforce analysis: The purpose of the workforce analysis is broadened to cover over representation as well as under representation of designated groups.

The draft Code is intended to replace the current operative instrument, namely the 2017 Code.

The Draft Code is not yet binding. Deadline for comments is 22 September 2026.

Click here to download the 18-page Draft Code

https://www.gov.za/sites/default/files/gcis_document/202607/55046gon7719.pdf 

Relevance to Auditors, Independent Reviewers & Accountants:

• The Employment Equity Amendment Act and Regulations is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• As an employer with more than 50 employees, you also need to comply with EE in your workplace.

Relevance to Your clients:

• An entity with more than 50 employees (company or close corporation) has a duty to comply with the Employment Equity Act, and directors have to fulfil their duties accordingly, otherwise they could be held liable.

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