Understanding Shops & Establishments Acts in India
The Shops and Establishments Acts are state-level labour legislations that regulate the conditions of work and employment in shops, commercial establishments, hotels, restaurants, theatres, and other places of public amusement or entertainment. Unlike the Factories Act (which covers manufacturing), these Acts govern the service and retail sectors that form the backbone of India's economy.
Each Indian state has its own Shops and Establishments Act, and the provisions vary from state to state. However, the core objective is universal: to regulate working hours, leave entitlements, rest intervals, holidays, employment of women and children, and other conditions of service for employees in commercial establishments.
Registration under the applicable state Shops and Establishments Act is one of the first compliance requirements for any new business in India. It is mandatory, and failure to register can attract penalties and hinder the business's ability to obtain other licenses and approvals.
Applicability & Coverage
Covered Establishments
- • Shops (retail, wholesale, online)
- • Commercial establishments (offices, agencies)
- • Hotels, restaurants, boarding houses
- • Theatres, cinemas, places of entertainment
- • IT/ITES/BPO offices
- • Banks, insurance offices, stock broking firms
Exemptions (Vary by State)
- • Government offices
- • Factories registered under the Factories Act
- • Establishments covered under Railways or Mines Act
- • Stalls at exhibitions or fairs (temporary)
- • Some professional practices (varies by state)
Registration Process
Every employer must register their establishment within 30 days of commencement of business. Most states now offer online registration through their respective labour department portals.
Documents Required
PAN card, Aadhaar of proprietor/partners/directors, address proof of establishment, rent agreement or property documents, photograph of the establishment, employee details.
State-wise Portals
Maharashtra: maitri.mahaonline.gov.in | Karnataka: sevasindhu.karnataka.gov.in | Delhi: labourcis.nic.in | Tamil Nadu: tnlabour.gov.in. Check your respective state portal for the online application.
Renewal
Registration must be renewed annually or as prescribed by the state Act. Some states (e.g., Maharashtra after 2017 amendments) have introduced lifetime validity, but most still require periodic renewal.
Working Hours & Overtime Rules
| Provision | Typical Requirement |
|---|---|
| Daily work hours | 8–9 hours (varies by state) |
| Weekly work hours | 48 hours (most states) |
| Spread-over | 10.5–12 hours including rest intervals |
| Rest interval | 30 minutes after 5 hours of continuous work |
| Overtime rate | Double the ordinary rate of wages |
| Weekly holiday | 1 day per week (usually Sunday) |
| Opening/closing hours | As prescribed by state (typically 7 AM–9 PM) |
Leave & Holiday Provisions
Earned Leave
12–21 days/year depending on state. Accumulation limits and encashment rules vary.
Casual Leave
7–12 days/year. Cannot be carried forward. For unforeseen personal needs.
Sick Leave
7–14 days/year. Medical certificate required for >2 consecutive days in most states.
National Holidays
Republic Day, Independence Day, Gandhi Jayanti are mandatory paid holidays.
Festival Holidays
5–9 additional festival holidays as declared by state government.
Maternity Leave
26 weeks for first two children under the Maternity Benefit Act, 2017.
Penalties for Non-Compliance
- • Non-registration: ₹5,000 to ₹25,000 (varies by state); can include imprisonment in some states
- • Late renewal: Late fees plus penalty; establishment may be deemed unregistered
- • Violation of working hours: ₹500 to ₹5,000 per violation
- • Non-maintenance of registers: ₹500 to ₹5,000
- • Non-display of certificate: ₹250 to ₹1,000
- • Employment of children: Severe penalties including imprisonment
Quick Compliance Checklist
- ✓ Register within 30 days of starting business
- ✓ Display registration certificate at a conspicuous place
- ✓ Display weekly holiday notice
- ✓ Maintain employee register, attendance register, leave register, and wage register
- ✓ Comply with working hours and overtime limits
- ✓ Renew registration before expiry
- ✓ Notify the Inspector of any closure or change in establishment details