South Africa's Democratic Alliance (DA), the country's second-largest political party, has initiated legal proceedings against the recently enacted Employment Equity Amendment Act. The legislation, effective from January 2025, empowers the Labour Minister to establish sector-specific racial and gender targets for management and professional roles in large companies, aiming to address systemic inequalities stemming from the apartheid era.

The DA contends that the law is unconstitutional and will negatively impact economic growth by imposing burdensome compliance requirements on businesses, particularly those with more than 50 employees. They argue that the Act may deter investment and lead to job losses, especially among minority groups. Helen Zille, DA Federal Chairperson, stated that the legislation "will continue to drive unemployment up and economic growth down," expressing concerns about its potential to discourage companies from investing in South Africa.

Under the new law, companies seeking to do business with the state must obtain a compliance certificate confirming adherence to the prescribed equity targets. The Act's implementation has intensified tensions between the DA and the ruling African National Congress (ANC), which supports the legislation as a means to rectify historical disparities.

The legal challenge by the DA comes amid international scrutiny, including criticism from former U.S. President Donald Trump, who accused South Africa of racial bias against its white minority. The outcome of this legal battle could have significant implications for South Africa's approach to employment equity and its broader efforts to address economic inequality.