The Department of Labour has amended Employment Equity regulations to include a newly updated EEA4 form that is applicable to ‘designated employers’. The EEA4 form collects information for the assessment of the salary gap between the highest-paid and lowest-paid employee.
It also aims to take a look at the inequality in rumuneration in relation to race and gender in various occupational levels.
The EEA4 will mean that designated employers must disclose the following:
– The average annual remuneration of their top 10% earners
– The average annual remuneration of their lowest 10% earners
– The median renumeration of all employers in the organisation
Businesses will also be required to indicate whether they have policies in place to address the gap between its highest and lowest earners.
Organisations will also be required to indicate how they will address this gap:
– Disclose the gap between the highest and lowest paid worker within the business.
The employer must also confirm whether or not the remuneration gap between the highest- and lowest-paid employees in the organisation is aligned to the policy to address that vertical gap;
– Indicate whether AA (Affirmative Action) measures to address the remuneration gap are included in the organisation’s EE (Employment Equity) plan
– Select a key reason for the income differentials
The legislation, however, does not stipualte that the information must be publically disclosed.
“While listed companies have taken it upon themselves to actively analyse their internal pay ratios and develop policies addressing this, unlisted companies should also take action by identifying their internal pay differentials, develop a policy framework around fair pay, and put plans in place to eliminate unjustifiable differentials in pay,” PwC said to BusinessTech.