Recently, Haryana Government has announced that the Employment of Local Candidates Act, 2020 will come into effect in the state from January 15, 2022. The legislation seeks to prioritize job opportunities for locals in various sectors within the state.
Detailed Overview of the Law
The act mandates businesses with 10 or more employees to allocate 75% of all job positions offering a monthly salary below Rs. 30,000 to eligible local candidates. This law applies to jobs in companies, societies, trusts, and limited liability partnership firms located within the state. Its objective is to restrict the inflow of workforces from other regions, even in sectors such as IT and ITes, where the State lacks sufficient local talent. This law is set to be enforced for a decade.
Moreover, the state government has reduced the residency requirement from 15 to 5 years for a person to obtain a bona fide resident certificate, providing some flexibility for private companies in their recruitment process. Employers must register all employees earning a gross monthly salary of Rs 30,000 or less on the designated portal available on the official website of the Labour Department, Haryana. Non-compliance with this Act’s regulations will lead to legal consequences.
Potential Concerns Regarding the Act
The implementation of the law could potentially lead to larger domestic and multinational investors relocating their operations to other regions due to the inability to find highly skilled labor. Existing industries might also be affected as the restriction on employing workers from other regions could result in a significant impact on their operations.
Furthermore, the imposition of this reservation system could result in an acute shortage of talent, especially for gig and platform-based companies. Moreover, critics argue that the act contradicts several provisions of the Indian Constitution that guarantee freedom of movement, non-discrimination based on birthplace, and equality before law.
Previous Attempts and Motives Behind Similar Legislations
Other political entities and states, such as AAP, Jharkhand, Maharashtra, Andhra, and Madhya Pradesh, have promised or tried to implement similar policies prioritizing locals in job opportunities. This strategy is often driven by vote bank politics as migrant workers make up a significant part of the unutilized electorate.
Moreover, these legislations aim to address rising unemployment rates amidst a shrinking government sector by enhancing local talent and retaining the income within the state. Furthermore, locals, who lose their land due to industrial land acquisitions, often demand such preconditions that industries should guarantee jobs for local youth.
Proposed Steps Forward
In light of these implications, it is suggested that the Haryana government reconsider the original salary limit of Rs. 30,000 per month, reducing it to Rs. 15,000 on a cost-to-company basis with gradual increases aligned with efforts to enhance local skillsets. Initial reservations for locals should be between 20% to 25% given that technical and specialized skills take time to develop among the state’s youth.
The most effective way to ensure sustainable growth beyond these legislations is to focus on economic recovery, job creation, skill training, and quality education. This approach will equip individuals to compete effectively in the open market.
