To deal with the issue of unemployment Haryana notified Haryana State Employment of Local Candidates Act, 2020 w.e.f. 15th January, 2022. The said law was introduced with a view to reserve 75% of private sector jobs for residents of the state.

Faridabad Industries Association & ANR. moved to Punjab and Haryana High Court stating that over 48,000 companies registered in the State of Haryana, would face immense hardship as they cannot employ anybody from outside the State from the date of commencement of the Act. On 3rd Feb, 2022, the High Court stayed the implementation of the law without giving any reason.

To challenge this order State of Haryana filed a special leave petition with Supreme Court. On 17th Feb, 2022, the Supreme Court set aside impugned order dated 03rd February, 2022 passed by the High Court with the following remarks-

“We do not intend to deal with the merits of the matter as we propose to request the High Court to decide the Writ Petition expeditiously and not later than a period of four weeks from today. The parties are directed to be present before the High Court on 22nd February, 2022 for fixing the schedule of hearing. The parties are directed not to seek adjournment. In the meanwhile, the State of Haryana is directed not to take any coercive steps against the employers.”

Since the High Court is given four weeks’ time to decide the Writ Petition, employers can wait till the final verdict comes. No coercive action shall be taken by the State of Haryana against the employers during this period.

Copy of the SC’s order:- https://main.sci.gov.in/supremecourt/2022/3725/3725_2022_5_6_33574_Order_17-Feb-2022.pdf

Highlights of the law:-

1. The Act applies to all the Companies, Societies, Trusts, Limited Liability Partnership firms, Partnership Firm and any person employing 10 or more persons and an entity.
2. Employers in Haryana need to employ 75% of the local candidates with respect to the posts where the gross monthly salary/wages are not more than 30,000 rupees.
3. Such employers need to register their existing employees with https://local.hrylabour.gov.in by 14th April, 2022. After that employers hiring new employees shall be registering them prior to the appointment.
4. Employers shall file online quarterly return for new employment in form-III by 20th April, 20th July, 20th Oct and 20th Jan every year.
5. Employer shall maintain records in digital form containing the details like number of employees, post details, number of Local Candidates recruited / appointed etc.
6. An employer may submit an application in form-I for availing exemption from the requirement of employing 75% of the local candidates where adequate number of local candidates of the desired skill, qualification or proficiency are not available.
7. Following employers are exempted from this law:-
   1. Vacancies in new Startups and new Information Technology (IT) / Information Technology Enabled Services (ITES) of new employers for a period of 2 year from the date of commencement of work or business or manufacturing process;
   2. Short term employment, the total duration of which is less than 45 days;
   3. Vacancies under any employer, who primarily engages in agriculture activities, such as growing/harvesting of field crops, fruits, nuts, seeds. vegetables, tea, coffee or raising animals, growing and harvesting of fish or other animals from a farm, ranch or their natural habitats but does not include any agricultural allied activity which involve therein manufacturing, trading, processing of agriculture products or produce or covered under the definition of establishment, as defined under sub clause (viii) of section 2 of the Haryana Shops and Commercial Act, 1958 (Punjab Act 15 of 1958) or Factory, as defined under sub clause (m) of section 2 of the Factories Act, 1948 (Central Act 63 of 1945);
   4. Vacancies under any employer for domestic work or services in residential homes;
   5. Vacancies, which are being filled up through promotion or transfer or by absorption of surplus staff of any unit of the same employer in the State; and
   6. Any class, post, skill and category of employment, as may be notified by the Government from time to time. Where the Local Candidates of the desired skill, qualification or proficiency required in such employment are not available.
8. This law is valid for 10 years.
9. Penalty for contravening the provisions of the Act and rules goes upto 5 lakh rupees.
10. Definitions:- Local Candidate” means a candidate who is domiciled in the State of Haryana.
    Explanation:- A person is considered domicile in Haryana if he has been permanently living in Haryana for a period of not less than 5 years or who have permanent house in Haryana but on account of their occupation have been living outside Haryana. Such candidates need to obtain the domicile certificate from the Haryana Govt. either online or offline. While obtaining the domicile certificate the candidate needs to ensure that they have a Parivar Pehchan Patra (PPP) issued under the Haryana Parivar Pehchan Act, 2021.

    “New Startups and new Information Technology (IT) / Information Technology Enabled Services (ITES)” means employer who has established or has commenced its operation within a period of two years, after the commencement of this Act.

    “Employer” means a Company registered under the Companies Act, 2013 (Central Act 18 of 2013) or a Society registered under the Haryana Registration and Regulation of Societies Act, 2012 (1 of 2012) or a Limited Liability Partnership Firm as defined under the Limited Liability Partnership Act, 2008 (Central Act 6 of 2009) or a Trust as defined under the Indian Trust Act, 1882 (Central Act 2 of 1882) or a Partnership Firm as defined under Indian Partnership Act, 1932 (Central Act 9 of 1932) or any person employing ten or more persons on salary, wages or other remuneration for the purpose of manufacturing or providing any service or such entity, as may be notified by the Government from time to time, but shall not include the Central Government or the State Government or any organisation owned by the Central Government or the State Government.