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Monday, 8 March 2021

The Haryana State Employment of Local Candidates Act, 2020 – Impact and Implications

The Haryana State Employment of Local Candidates Act that was passed under a week ago comes on the heels of a Bill sanctioned last year. The Bill aimed to provide reservations to local people in private-sector jobs that paid a salary under Rs. 50,000 a month. The State government presented a contention stating that this move will discourage migrant-influx, and deter the prospect of people coming in to seek low-paying jobs.

This is not the first move of its kind. Several other states have looked to make similar reservations and allowances for locals. Last year Andhra Pradesh announced the same 75 per cent reservation in industries and factories within the private sector. Rajasthan made an allowance of 5 percent to certain communities in public sector employment. Maharashtra extended a 13 percent reservation for certain communities in public employment in the year 2018. Telangana increased its reservation for SC, ST, and backward classes to 62 percent in public employment just one year prior. Karnataka can, perhaps, be called the forerunner for announcing a 100 per cent reservation for all blue-collar jobs in the private sector in the year 2016.

Coming back to the Haryana context, here are some key considerations in the enforced Act:

Contextual Insight:

While the Act quite clearly captures the intent or spirit, it is the corresponding Rules that will articulate the real compliance mandates and their execution. Given that this is a state law, it is expected that this will be expedited, although we do need to factor in the lag between publishing the draft and its being notified. 

Companies, on their part, can begin to prepare for this eventuality. Creating a database of resumes of local candidates is a good start. Preliminary interviews may be conducted to qualify prospects. Meritocratic organisations can ensure they do not end up hiring below norms only in order to comply by following these measures. It is important to be mindful that 75 percent local is a big ask.


The Act extends to:

(i)               Companies, partnership firms, societies, trusts, and limited partnership firms

(ii)              All people employing over 10 persons

(iii)            Local candidates (Defined as those domiciled in the state – either born in Haryana or having lived there for at least 15 years)

(iv)            Eligible local candidates capable of being trained in the absence of qualified persons

(v)              The law will be in effect for an initial period of 10 years



Registration has been made compulsory for all applicable establishments and employers within three months of the Bill coming into effect. All employees with a monthly salary below Rs. 50,000 must be registered on the portal. No new employment may be effected until the completion of the registration on the designated portal.



Exemptions may be claimed if candidates with the desired proficiency, qualification, or training are unavailable locally. All claims will be subject to the review of either the Deputy Commissioner or authority of a higher rank. Claims may attract the following outcomes:

(i)               Acceptance

(ii)              Rejection with recorded reasons

(iii)            Directive to the employer to train candidates to achieve skill or proficiency desired



Failure to provide 75% employment to local candidates will incur a fine between Rs. 50,000 and Rs. 2 lac, along with an additional penalty of Rs. 1,000 per day until the criteria have been met.



How do locals benefit from this Act?

The Act applies to all locals domiciled in Haryana. They can avail improved chances of employment in the private sector. Candidates will need to necessarily register on the designated portal even for other facilities. Employers will make all recruitments only through this portal.


Is there any penalty for contravention?

Penalties for private companies that are proven to commit violations of the Act can range anywhere from Rs. 10,000 to Rs. 2 lac. Should the employer continue to violate the Act, a daily fine of Rs. 1,000 will be charged until the violation continues. Employers will be charged Rs. 50,000 for falsification of records, or for knowingly making false statements.

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