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Possible Impact of Haryana’s 75% Reservation of Local candidates for Private jobs

March 12, 2021

By Lucy Rana and Nihit Nagpal

The State of Haryana has proposed to implement the Haryana State Employment of Local Candidates Act, 2020 and provide 75% employment to local domiciled candidates by employers in the State of Haryana [1].

Hence, the Government of Haryana seeks to reserve 75% of new jobs for local candidates in various companies, societies, trusts, and limited liability partnership firms situated in the State of Haryana.  This reservation will be for local candidates for all jobs with a compensation below INR 50,000 per month.

As the Law may be closer to implementation, the law imposes various challenges to existing establishment based in the State of Haryana.

Possible Challenges for the Industry

  • Unclear on type of employment reserved– The law is silent & no explanation has been provided on the type of employment it wants to reserve for local candidate.
  • Operational issues in Company’s talent acquisition –there will be lot of operational issues in recruiting the candidate where the Companies focus on hiring on tech skills.
  • Long Procedure for claiming exemption– Where adequate number of the local candidates of the desired skill, qualifications or proficiency are not available, Companies will have to go through long procedure of making application and subsequent inquiry by the designated officer.
  • Added Expense: Training the local candidate to achieve the desired skill the company increases the additional expense for training local candidates
  • Additional compliance and fear of contravention – The law places much stress on quarterly reporting of recruiting 75% of local domiciled candidates and in case of contravention of any provision hefty penalties will be imposed.
  • Relocation – Companies that are looking for expansion of their business may approach towards neighboring states for establishing offices to avoid this law. Indirectly impacting the real estate sector also.

Sources:

  1. https://www.hindustantimes.com/chandigarh/plea-challenging-75-quota-for-locals-in-private-industries-in-haryana-withdrawn/story-19WVHScx3asUBmdZiWuXQO.html
  2. https://trak.in/tags/business/2021/03/11/it-bpo-firms-all-set-to-leave-gurgaon-due-to-reservation-rule-noida-next-destination/
  3. https://www.moneycontrol.com/news/podcast/exclusive-haryana-cm-manohar-lal-khattar-says-75-private-sector-reservation-only-for-non-technical-jobs-6628041.html

[1] https://ssrana.in/articles/haryana-employers-to-give-75-employment-to-local-domiciled-candidates/

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