The Haryana State Employment of Local Candidates Act, 2021
Compliance Legal Drafting

The Haryana State Employment of Local Candidates Act, 2021

Haryana State Employment of Local Candidates Act, 2021 received the Governor’s assent on 26th February, 2021 to provide seventy-five per cent employment of local candidates by employer in the State of Haryana. The Act shall come into force on such date, as the Government may, by notification in the official Gazette specify. This Act applies to all Companies, Societies, Trusts, Limited Liability Partnerships, Partnership Firms and persons employing 10 or more persons. However, the Central Government, the state government and the organisations owned by the Central / state government are excluded from the provisions of the Act.

The Act mandates Covered Employers to register on the government’s designated portal, such employees in their establishment who earn gross ‘salary or wages’ up to INR 50,000 per month, within three months of coming into force of this Act. The term ‘salary or wages’ has not been defined in the Act.

Covered Employers are required to reserve 75% of the posts – wherein the monthly wages are not more than INR 50,000 for persons domiciled in the state of Haryana. If a Covered Employer wishes to recruit from outside the state on the ground that there is a dearth of local candidates who meet the requisite skill, qualifications or proficiency, it would be required to apply to the Designated Officer appointed under the Act. Before deciding on the application, the Designated Officer is required to assess whether the Covered Employer made attempts to recruit local candidates of the desired skill, qualifications, or proficiency. The Designated Officer can not only accept or reject the application, but also direct the Covered Employer to train local candidates so that they meet the requirements

The bill provides for 75% quota in private jobs for Haryana-domiciled job seekers. The Act will remain in force across the state for a period of at least 10 years.

“Domiciled in State of Haryana” means a candidate who is domiciled in Haryana is called a local candidate and will be able to avail the benefit of this reservation while seeking employment in the private sector.  For the domicile status, a person should be born in Haryana or have lived there for at least 5 years.

The Act will remain in force across the state for a period of at least 10 years. The Act requires Covered Employers to furnish quarterly reports regarding local candidates recruited by them in the manner prescribed by the state government in its rules.

Non-compliance with the requirement of registration of employees may lead to imposition of a fine within the range of INR 25,000 – INR 1,00,000, and if contravention continues with a further penalty of RS 500/- per day. Similarly, failure to fill in 75% of the relevant posts for local candidates in the manner set out in the Bill may attract fine in the range of INR 50,000 – INR 2,00,000, and if contravention continues with a further penalty of RS 1,000/- per day.. Private companies can be fined a minimum of Rs 10,000 to a maximum of Rs 50,000/- once it is established that the employer has committed a violation of provisions of the Act. However, if the employer continues to commit the violation even after conviction, a penalty of Rs 100 per day till the violation continues shall be imposed. Moreover, a penalty of Rs 200,000to Rs 500,000/- shall be levied on the employer who produces false records or counterfeits or knowingly makes/ produces a false statement. Notably, if an offence has been committed by a company, every director, manager, secretary or person concerned with the management of the company would be deemed guilty of the offence, unless he / she is able to prove that the offence in question was committed without his / her knowledge or consent.

No local candidate shall be eligible to avail of the benefits under this Act unless he registers himself on the designated portal

Under the Act, notified “Administrative Officers” will have the power to enter the premises of any private enterprise, check their records, look for anomalies and impose penalties. A notice will be given one day prior to the date of inspection by the government officials. The inspection system will keep a check on the information filled on the portal and whether the practice follows the same.

The employer may claim exemption from the employment of local candidates when an adequate number of local candidates of the desired skill, qualification, or proficiency is not available by applying to the Designated Officer in such form and manner, as may be prescribed.

The Designated Officer may accept or reject the claim or may direct the employer to train local candidates to achieve the desired skillset within a stipulated time.

The authorities may not compel an employer to terminate the services of its existing non-local workforce so as to meet the 75% reservation requirement.

The Act is likely to significantly increase the costs of businesses on several fronts, including training of local candidates and displacement of the present non-local workforce.

The detailed rules and regulations are soon to be notified and would be published in the official gazette.

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