In response to a spate of anti-immigrant demonstrations and the persistently high unemployment rate that is proving hard to improve, the Minister of Employment & Labour introduced the Employment Services Amendment Bill into the National Assembly on 29 May 2026.
We unpack below what the implications of these changes will have on the employment of foreign nationals in South Africa.
Purpose of the Bill
The changes proposed to the Employment Services Act 2014 have been quoted by the Minister as aiming to modernise the regulation of the labour market but, perhaps more accurately, as “enhancing the job opportunities for South African citizens”. It is not the first time that changes have been proposed – a Bill was introduced in 2022 – but the 2026 edition is far more reaching.
Employment of Foreign Nationals in South Africa is changing
The Bill defines a foreign national as someone who is not a South African citizen and importantly excludes permanent residents, refugees or asylum seekers.
The Bill seeks to introduce a new Chapter 3A, which will require employers to:
- Ensure the foreign national is entitled to work in RSA and is entitled to perform the work in which they are employed.
- Satisfy themselves (“in such manner as may be prescribed”) that there are no persons in RSA with the necessary skills to fill the vacancy.
- Prepare a skills transfer plan in respect of the role in which the foreign national is employed.
- Employ a foreign national on terms and conditions of employment that are not inferior to those that would be provided to SA citizens.
The need for employers to establish that there are no locals with the skills for the vacancy will pose a significant challenge to justify the appointment of foreign workers.
Quota System
A further, and contentious result of the new Chapter 3A is the ability for the Minister (in consultation with the Employment Services Board) to set maximum quotas for the employment of foreign nationals in any sector. In fact not just in any sector; the quota could be applied to one or more specific sectors, occupational categories, regions within the sector or nationally.
The impact of these quotas, once gazetted, will be that no employer may employ a greater percentage of foreign nationals than is permitted in terms of a quota. To illustrate how this may work, the retail / wholesale sector (according to Statistics South Africa) has around 13.5% foreign-born workers. If a quota is set at that level, employers operating in the industry will need to review the status of their employees to ensure their percentage of foreign nationals is below that threshold.
As we have seen with other recent legislative changes, some relief is given to small businesses; the need for compliance with quotas will not apply to an employer with fewer than 10 employees.
Tough Enforcement & Penalties
Employers are being confronted with the twin challenge of more enforcement officers and far tougher financial penalties for non-compliance.
In a speech to mark Workers’ Day, the Minister noted that the strengthening of the Department’s “capacity to enforce labour legislation, protect vulnerable workers and ensure fair labour practices” was being led by 10,000 new inspectors announced during the State of the Nation address, plus a further 20,000 inspector interns. Given that the number of inspectors currently sits at 2,000, this is quite an increase.
Further, inspectors will be armed with far greater penalties to punish any non-compliance. The Bill proposes fines for employers (including domestic employers) who illegally employ foreign nationals at R100,000.00 for a first-time contravention; R200,000 for a repeat offence within three years and, for multiple contraventions, the greater of R1 million or 10% of annual turnover.
Required Steps for Employers
Critics of the Bill have suggested inevitable legal challenges, particularly regarding the implementation of quotas, given that they may act to the detriment of lawful resident foreign nationals who hold valid work authorisation in South Africa.
For now, though in draft form, it is prudent for employers to:
- Review the status of their employees and ensure that any foreign national has the right to work and the right to perform the work he or she is doing.
- Consider active steps to verify the passports and permits provided by foreign nationals.
- Conduct a labour market test and prepare for skills transfer plans (which have long been an existing obligation).
- Prepare the required paperwork for inevitable Department inspections.
Although the Bill remains subject to parliamentary scrutiny and possible legal challenge, it signals a clear policy direction. Employers should expect greater scrutiny of the employment of foreign nationals, increased compliance obligations and a stronger emphasis on demonstrating efforts to recruit and develop South African workers