The Department of Labor of South Africa has amended the Employment Equity regulations to make the salary structure more equitable and purportedly to make it fair.    Now, designated employers have to update EEA4 form, which aims to collect information for the assessment of the remuneration gap between the highest-paid and lowest-paid employees. It is also designed to monitor inequalities in remuneration in  terms of race and gender in the various occupational levels.
Analysts say that the recent move is more political than economic since the ruling ANC has been mentioning about ending differentiation and discrimination on the basis of race and color. Though it will be welcomed by the common man, may find stiff resistance from the corporate world, where salary levels are much higher than the government as also the gap between highest and lowest paids . The form is applicable to designated employers who employ 50 or more employees or have a total annual turnover that exceeds the annual turnover of a small business.The definition of designated employers covers a wide range of establishments , such as listed and unlisted companies  and state-owned enterprises, the government, and non-profit organizations etc.
The form seeks to collect information on a number of vectors including the average annual remuneration of the top 10% of their top earners; the average annual remuneration for the bottom 10% of their bottom earners and the median earners remuneration in the organization. Though couched as an affirmative action measure to bridge the gap between the rich and poor, the new direction is likely to rake up many issues. Foremost is the paper work involved. Even a company employing 50 persons or above, will have to comply with the stipulation, which may involve their time and resources.
There is a clause that if there is a difference in remuneration gap, the employer will have to give plausible reasons for the difference. Some of the wage gaps are difficult to be explained since there may be any measurable attribute to justify the difference in salary structure. It is a common practice in the corporate world that  the employers would offer higher salaries at the starting level to attract and retain talents. Under the new dispensation, this could be a difficult proposition.
Some analysts observe that this may force talented people to leave the country to join multinational corporations elsewhere in Africa or any other part of the world, leading to talent drain, which is already reported to be very high. It is possible there may be heated discussions on this subject henceforth. On hindsight, many analysts  opine that a few countries, who have introduced this system of wage structure, later had to disband it since it could not attract the right talent and faced difficulties  in implementing the policy.
