1. INTRODUCTION

In 2020, the government of Haryana proposed the Haryana State Employment of Local Candidates Bill, 2020 which provided a specific quota for the local people in private sector jobs that offer a salary of less than INR 50,000 a month. The Bill received the assent of the Governor of Haryana on March 02, 2021, and it is yet to be notified in the official gazette. The objective of the Haryana State Employment of Local Candidates Act, 2020 (the "Act") is to have employers comprise 75% of their workforce as local candidates from Haryana.

2. SIGNIFICANT FEATURES OF THE ACT

Particulars Content
Applicability Applicable to the state of Haryana for a period of 10 years from the date of notification, and applies to all companies, societies, trusts, partnership firms, limited liability partnership firms, any entity employing 10 or more persons, and any entity, as may be notified by the government of Haryana.
Registration

It is mandatory for every employer to register all employees receiving gross monthly salary or wages not more than INR 50,000 on the designated portal (the "Designated Portal") within 3 months from the Act coming into force. This provision puts a complete restriction on employing persons who have not been registered on the Designated Portal.

Local candidates are those who are domiciled in the state of Haryana (a "Local Candidate") and they are required to register themselves as well on the Designated Portal to avail and enjoy the benefits under the Act.
Recruitment In relation to each employer, for positions where the gross monthly salary or wages are not more than INR 50,000 or as may be notified by the government of Haryana, 75% of the workforce must comprise Local Candidates (the "Minimum Requirement"). The Local Candidates can be from any district of Haryana. However, an employer may restrict the employment of Local Candidates from any district to 10% of the total Local Candidates.
Exemption The Act provides an option to an employer to seek exemption from the Minimum Requirement in case an adequate number of Local Candidates of the desired skill, qualification, or proficiency are not available, by applying to the appropriate authority. Such an exemption can be granted or rejected by the appropriate authority after making appropriate inquiry, as deemed fit.
Compliances

An employer is required to furnish a quarterly report in a prescribed format and within a specified date in respect of total number of Local Candidate(s) employed and appointed during the concerned quarter, on the Designated Portal.

The quarterly reports furnished by an employer will be examined by an authorised officer, and the authorised officer has the power to call for any record, information, or document in the possession of an employer for the purposes of verifying the quarterly report. The authorised officer also has rights to enter the premises of an employer between 0600 and 1800 hrs on a mutually agreed time to inspect the records, register, documents, or to perform any other duties entrusted upon him.
Appeal An employer has a right to file an appeal before the designated appellate authority, within 60 days against an order passed by the authorities under the Act.
Penalties

General Penalty.

In case of any contravention of the provisions of the Act, an employer is liable to a penalty ranging from INR 10,000 to INR 50,000. If the contravention continues after the conviction, then, further penalty may extend to INR 100 for each day, till the time such contravention continues.

Specific Penalties.

  1. If an employer contravenes the provision relating to registration, then he shall be punishable with penalty ranging from INR 25,000 to INR 10,00,000, and if the contravention continues after conviction, with a further penalty which may extend to INR 500 for each day, till the time such contravention continues.
  2. Violation of the provisions relating to recruitment of Local Candidate(s) will attract a penalty ranging from INR 50,000 to INR 20,00,000, and if the contravention continues after conviction, with a further penalty which may extend to INR 1,000 for each day, till the time such contravention continues.
  3. A person is punishable with a penalty which may extend to INR 50,000 for each offence if such person:
    1. produces false records, or counterfeits, or knowingly makes or produces or uses a false statement, declaration or evidence regarding any document in connection with compliance of any of the provisions of the Act or any rules made thereunder; or
    2. makes, gives or delivers knowingly a false return, notice, record or report containing a statement, entry or detail.

Any subsequent conviction for the same offence is punishable with penalty ranging from INR 20,00,000 to INR 50,00,000.
Principles of Natural Justice An employer has to be provided a notice and an opportunity of being heard before any order or punishment.
Employer representative's liability If an offence is committed by a company, every director, manager, secretary, agent, or other officer or person concerned with the management is deemed to be guilty of the said offence, unless it is proved that the offence was committed without knowledge or consent of such director, manager, secretary, agent, or other officer or person concerned with the management.

3. INDUSLAW VIEW

This step by the government of Haryana is a clear move towards securing employment in private companies for persons domiciled in Haryana. However, there is no clarity yet as to who will be considered as persons domiciled in Haryana. The word 'domicile' or the criteria to decipher who will be considered as a person domiciled in Haryana has not been provided in the Act.

While the government of Haryana provides residence certificate to persons who are either born in Haryana or are living in Haryana for 15 years, as proof of residence, to avail certain benefits in educational institutions or in the government services, this aspect however has not been taken into consideration in the Act. As the rules under the Act have not been framed and notified yet, there is certainly a possibility that the government of Haryana may clarify and define either 'domicile' or the criteria for a person to be considered as domiciled in Haryana.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.