Labor Market Testing Spreads to Chennai

IMPACT – Medium

What are the changes? Another major city in India is enforcing labor market testing before foreign workers can register as residents in Chennai.

What does the change mean? Employers should be prepared to submit evidence that they attempted to recruit Indian workers to fill jobs.

• Implementation timeframe: Immediate.
• Visas/permits affected: Registration of foreign residents; employment visa extension.
• Who is affected: Foreign nationals registering at the Chennai Foreigners Regional Registration Office (FRRO).
• Impact on processing times: There may be a delay in a foreign assignee’s registration if the employer does not have evidence of labor market testing. Foreigners are required to register within 14 days of arrival.
• Business impact: The spread of labor market testing in India may impact decisions on assignment of foreign workers.
• Next steps: Employers should be aware of the new practice in Chennai and other parts of India and document their efforts to recruit locally.

Background: BAL Global News first reported the change in procedures in January, when Kochi and Hyderabad FRROs began seeking labor market testing evidence from employers. Throughout this year, the practice has been consistently enforced in Hyderabad and has been enforced off and on in Kochi and Bengaluru. The decision whether to enforce this unofficial policy is up to the discretion of the immigration authorities.

In Chennai, the practice is enforced sporadically based on the FRRO officer’s discretion. An employer may be asked to sign a certification that “no qualified Indian is available” for the position. The employer would then submit a list of the foreign employee’s qualifications and professional skills that are essential for the position, along with evidence that the employer made efforts to search for a suitable Indian for the job.

BAL Analysis: To avoid delays, employers should plan to test the local labor market by placing job advertisements in a local newspaper, and should retain proof of their efforts in case they are required to submit evidence when registering a foreign employee.

This alert has been provided by the BAL Global Practice group. For additional information, please contact GlobalVisaGroup@bal.com.

Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.