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Shop and Establishment provisions

The Shops and Establishments Act governs the conditions of work for employees in shops, commercial establishments, hotels, and other places of public entertainment in India. It is a state-specific law, meaning every state and union territory has its own version of the act, with slight variations in rules and regulations.

Key provisions regulated by the Act :

While state-level rules may vary, the acts generally regulate the following conditions for employees :

  • Working Conditions : The Act sets limits on daily and weekly working hours, provides for rest intervals and meal breaks, and dictates opening and closing hours for shops and establishments.
  • Employee Welfare : It mandates hygienic conditions, adequate lighting and ventilation in workplaces, and precautions against fire.
  • Leave and Holidays : Employees are entitled to various types of leave, including annual, maternity, sickness, and casual leave, as well as weekly holidays and wages for public holidays.
  • Wages and Payments : The Act specifies the time and conditions for wage payments, regulates deductions, and ensures the provision of at least minimum wage.
  • Employment Practices : It prohibits the employment of children and sets rules for the employment of women and young persons.
  • Record Keeping and Notices : Employers are required to maintain employee records and display relevant notices within the establishment.

Registration and Compliance :

All covered establishments must register with the state's labour department and adhere to the following processes :

  • Mandatory registration : Any new shop or commercial establishment must apply for a registration certificate within a specified time frame (e.g., 30 days) of starting business. This applies to both physical and online businesses.
  • Registration certificate : The registration certificate, once issued by the Chief Inspector or a designated authority, must be prominently displayed at the workplace.
  • Amendments : Any changes to the business, such as its name, address, or ownership, must be notified to the authority within a specific period.
  • Closure notification : In case of business closure, the employer must inform the Chief Inspector to cancel the registration.
  • Penalties for non-compliance : Failing to register or follow the rules can result in penalties, which vary by state.
Who is covered by the Act ?

The act broadly applies to all shops and commercial establishments, including :

  • Retail and wholesale shops
  • Commercial and professional establishments, such as those in banking, insurance, and auditing
  • Residential hotels, restaurants, and eateries
  • Theatres and other places of public entertainment
  • Warehouses and godowns
  • IT companies and service organizations

Important distinctions :

  • State-specific rules : Since it is a state-level Act, the specific provisions and regulations can vary from one state to another. Employers must comply with the rules set by their state’slabour department.
  • Factories are excluded : Premises covered by the Factories Act, 1948, are explicitly exempted from the Shops and Establishments Act.
  • Micro-enterprises : In some states, such as Maharashtra, businesses with fewer than 10 employees must still register but follow a simplified "intimation" process.