Companies could be fined up to R1 million for hiring undocumented foreigners

The government is set to introduce stricter measures governing the employment of foreign nationals as part of sweeping amendments to South Africa’s labour laws aimed at protecting local jobs and addressing skills shortages. The proposed Employment Services Amendment Bill, 2026, seeks to create a comprehensive framework regulating the recruitment and employment of foreign nationals while promoting greater employment opportunities for South African citizens and permanent residents. This comes against the backdrop of repeated inspections by the Department of Employment and Labour, which have uncovered numerous cases of employers hiring undocumented migrant workers. Over the past few years, labour inspectors, often working alongside officials from the Department of Home Affairs and law enforcement agencies, have conducted raids and compliance inspections across sectors including hospitality, construction, agriculture, security, retail and manufacturing. These inspections have frequently revealed foreign nationals working without valid permits or documentation, while some employers have been accused of failing to verify workers’ legal status before hiring them.

Employers must prove no suitable South African available

One of the most significant changes contained in the bill requires employers to satisfy themselves that no suitably qualified South African is available before recruiting a foreign national.

Employers will also be required to verify that foreign nationals are legally entitled to work in South Africa and to perform the specific duties for which they are employed. They must retain copies of visas and other documentation proving the individual’s legal right to work in the country.

The bill further requires employers to develop skills transfer plans for positions occupied by foreign workers, ensuring that expertise is eventually transferred to South African employees.

Minister empowered to set foreign worker quotas

The amendments would grant the minister of employment and labour the power to set sector-specific quotas that limit the number of foreign nationals that companies can employ. Under the proposed legislation, quotas may be applied nationally, regionally, within specific industries or across designated occupational categories. Before quotas are implemented, draft regulations must be published for public comment and reviewed by the Employment Services Board. In determining quotas, the minister will be required to consider factors including the availability of skills among South Africans, refugees and asylum seekers, as well as the country’s international obligations.

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Heavy penalties for non-compliance

The bill also introduces significantly tougher penalties for employers who fail to comply with the new rules. Companies found to be in violation of provisions relating to the employment of foreign nationals could face fines of up to R100,000 for a first offence, R200,000 for repeat offences, and in severe cases the greater of R1 million or 10% of annual turnover.

Labour inspectors will be given enhanced powers to monitor and enforce compliance with the legislation.

Foreign workers protected against exploitation

While the bill seeks to tighten regulations, it also strengthens protections for foreign nationals working in South Africa. Employers will not be allowed to employ foreign workers on terms and conditions inferior to those offered to South African employees. Foreign workers who are unlawfully employed will still retain the right to enforce labour-related claims against their employers. The proposed law also prohibits employers from requiring foreign nationals to perform work that falls outside the conditions of their visas or permits.

State says reforms aim to balance labour needs

According to the memorandum accompanying the bill, the reforms are intended to facilitate the employment of foreign nationals where their skills are required, while ensuring that their recruitment does not adversely affect employment opportunities for South Africans. The legislation also seeks to improve alignment between labour laws, immigration regulations and refugee legislation while promoting the availability of critical skills within the South African economy.

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