On Tuesday, 2 March 2021, Hon’ble Governor of Haryana gave assent to the Haryana State Employment of Local Candidates Act, 2020, which provides 75% reservation to local candidates in Private Sector Haryana State Employment of Local Candidates Act, 2020 (Haryana Act No_3 of 2021). The reservation quota will apply for 10 years in Haryana State from the date of its commencement. On completion of 10 years, the effect of the said act will finish, and upon such cesser, section 6 of the General Clauses Act, 1897 (Central Act 10 of 1897), shall apply as if this Act had then been repealed by a Central or State Act. It applies to all the Companies registered under Companies Act, 2013, Societies, Trusts, Limited liability Partnership firms, and any person who employees 10 or more persons or any other entity, as may be notified by the State Government.

This reservation will be for local candidates who are domiciled in the State of Haryana. The eligibility to become a domicile of Haryana is, the candidate must have lived there for 15 years,.for the posts where the gross monthly salary does not exceed Rs. 50,000 p.m.

It shall be noted that for availing other job facilities, the local candidates will also mandatorily have to register themselves on a designated portal.

It is also mandatory for every employer to furnish quarterly report of the local candidates employed and appointed during that quarter period. The report shall be furnished in designated portal. Further, it will be examined by the Authorised officer with the aim of complying with the objectives of the act.

This Act also casts responsibility on the employer to register all employees drawing less than Rs. 50,000 per month within 3 months of the commencement of the Act. Details of the portal along with the procedure will be notified by the State Government in the rules to be notified.

To add on, Haryana reservation law also promises to improve the skill set by provide training to eligible candidates when qualified people are not available.

The new law allows private companies to hire employees from outside of the State of Haryana only if they do not find a suitable local candidate for the job. However, in that case, the company will have to inform the government about the step. This exemption can only be availed where an adequate number of local candidates of the desired skill, qualification or proficiency are not available, provided that the employer has to claim the exemption from the requirement by applying to the Designated Officer. Further, it will depend on the Designate Office to allow or disallow the employer from availing the exemption.

It can be thus inferred that the main aim behind the enactment of the act was tackling the unemployment among the Haryana State. As per the government, the law will discourage the influx of migrants seeking low-paid jobs. This act will have a significant impact on local infrastructure and also an attempt towards the proliferation of slums.

Keeping in mind the aim behind the enactment of the law, the act contains penal provisions against the companies for not following the provisions of the law. Private companies or the employer violating the provisions of the act shall be liable to a penalty which shall not be less than Rs. 10,000 but it can extend up to Rs. 50,000. If the employer continues to violate the provisions even after conviction, he has to pay the penalty of Rs. 100 for each day till the time contravention is consumed and if the employer fails to complete the registration of employees within the time frame, then shall be guilty of an offense and punishable by a penalty of at least Rs. 25,000 and which may extend to Rs. 1, 00,000. If the employer continues to violate the provision after getting convicted, he shall be liable to pay Rs. 500 for each day till the time the provision is being violated. Talking about offense committed by limited liability partnership with the consent of convenience of a partner or due to negligence of the partners, they shall be convicted for the offense too.

One can thus infer that the act seems to have a drastic effect on the economic infrastructure of Haryana but may adversely impact employment levels in Uttar Pradesh, Uttarakhand, Delhi, Bihar, Jharkhand, and Punjab. The main reason behind it is that people who are not Haryana domicile had been dependant on the Haryana for employment as Haryana has prominent IT and automobile Hubs in cities like Gurugram, Faridabad etc. Not only the employees but also Haryana is dependent on human resources from Delhi, Punjab, Bihar, and Jharkhand. This will also directly increase the level of competition for employment in neighbouring states for the next 10 years. However, it is expected that the act will have a high contribution in eradicating unemployment in the state of Haryana.

Disclaimer: This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts.