Shop and Establishment

Know the Applicability of Shop and Establishment Act

calendar04 Jul, 2021
timeReading Time: 4 Minutes
Shop and Establishment Act

Every commercial establishment in India is bound to operate under the ambit of the Shop and Establishment Act. The aspects that this Act governs include sanitation conditions within the working premises, working protocols for the workers, child labor, registration, and so on. The Act works in the best interest of workers as well as the owner of the establishment. In this write-up, you will come to know about the applicability of the Shop and Establishment Act in brief.

The ultimate objective of this Act is to ensure;

  • The harmonious working environment within the commercial establishment benefits the employees at large.
  • Complete prevention of child labor
  • Mandatory registration for all commercial establishment
  • Legit working policies for the employees
  • Inculcation of proper wages and leave system

Read our article:A Complete Overview of Shop and Establishment Act And How to Obtain its License?

Applicability of Shops and Establishment Act in India

The commercial establishments that come under Shop and Establishment Act include;

Applicability of Shops and Establishment Act in India

The issuance of the Shop and Establishment license is done on a state-wise basis. The labor department of the respective states holds the statutory rights to issue this license. All states have their respective online portal under different names where the applicant can fill a web-based form to apply for this license.

For instance, the commercial establishment owners operating in the state of UP can visit an online portal, viz Nivest Mitra. Likewise, the business[1] owners residing in the state of Haryana can go to the portal called “Labour Department Haryana” to get this license.

However, there is one thing in common in this regard. The document and detail required to be furnished for this license remain more or less the same. The list below reflects the same.

  • The name of the commercial establishment
  • Name as well as details of the employer and the employees serving the establishment
  • Establishment’s address and the sale deed’s copy of the same. Note: a rental agreement can be used as a substitute for a sale deed here.
  • PAN Card of the owner and the business

The online filing of application is way easier than you think. All you need to reach out the respective state portal and fill in the web-based based form. However, you need to be watchful while uploading the supporting documents. The concerned here is the size and the format of the documents. The form usually indicates such information in the uploading section.

After successful online filing, the details therein will be routed to the concerned official for investigation. During this phase, the designated official may pay a surprise visit to the place of business to determine whether everything is in compliance or not.  Once satisfied, the official would intimate the same to the authority and the certificate will be bestowed to the applicant.

Upon receiving the license, the business owner needs to display the same in their place of business. Remember this is a legal compulsion. Keep in mind that any changes in the aforesaid details would lead to the renewal of license, which also seeks the intimation to the inspector within 15 days of doing the same. Any contravention in this context could attract the penalties as mentioned under the Act.

That’s all about the applicability of the Shop and Establishment Act in India.  Let’s move to another important section that talks about the post-registration compliances meant for the employers managing the commercial establishment.

Post-registration compliances for Shop Act License Holders

  • No employee is permitted to serve the establishment for more than 9 hours/day. The timeline for continual working should not be more than 5 hours. 30 minutes of break is mandatory in this regard.
  • Every employer must take measures in accordance with the Act relating to the health and safety of their employees.
  • No women employee shall be treated prejudicially when it comes to training, recruitment, promotion, or wages.
  • No employer should temper the prescribed timeline of working for women. 
  • The total number of working hours including the rest interval for employees should not be more than 10.5 hours. The workers that deal with the intermittent nature of work are not permitted to work more than 12 hours.
  • Any workers that serve extra working time are eligible for overtime wages. However, there is a cap on such a timeline, which is kept at 125 hours for the period of 3 months. Anything more that than will not be subjected to any sort of payment.
  • Every employer must grant 8 days of casual leave to workers along with wages per calendar year, which must be credited to their account every quarter.
  • Children below 14 years of age are prohibited to work in any commercial establishment.
  • The permissible working timing for teenagers below 17 years of age is kept at 3 hours including the 30 min rest time
  • No teenager is permitted to work before 1 AM and after 7 PM in any commercial establishment and to engage with work that is detrimental to life, health, or morale.
  • The state government mandates every employer to ensure proper maintenance of records and registers.
  • Employer of commercial establishment in view of State Government’s discretion should grant identity card for employees.


It is clear from the above that the Shop and Establishment Act Regulates the working environment as well as policies to ensure the well-being of the workers. Furthermore, the Act also mandates employers to treat their workers in accordance with provisions mentioned therein. Establishments that come under this Act should have Shop and Establishment license in place before commencing business activities. It’s important to understand the applicability of the Shop and Establishment Act to the fullest to avert possible legal conflicts. In case you seek any sort of guidance in this regard, prompt us without thinking twice.  

Read our article:Wondering why Shop and Establishment License is Required for Business?

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