Most businesses in India, and their workers, fall under the Shops and Establishments Act (SEA). It regulates wages, working hours, holidays, earned leave, child labour, women’s rights, and more.
This article gives a bird’s-eye view of the Act across most states. The broad structure is similar everywhere, but the specifics vary state to state — check the relevant state page for accurate details.
Unlike the Factories Act, there’s no single central law for shops. Each state runs its own Shops Act, built on a shared model code.
A Brief History
Labour laws exist to protect workers’ rights, ensure safe working conditions, and regulate how companies treat their workforce. India has different acts for different industries and work environments.
The Shops and Establishments Act traces back to the 19th-century Industrial Age in Europe — its protections built up gradually over centuries of labour struggles.
After independence, as new states formed, each one enacted its own Shops Act based on a shared model code. Maharashtra was among the earliest, bringing its Shops and Establishments Act into force in 1948.
In 2016, the Government of India released a revised Model Shops & Establishments Act for states to adopt. Maharashtra again led the way, adopting the new model.
More states are expected to update their decades-old acts as business needs continue to change.
Applicability
The Act applies to most businesses, excluding factories, mines, and similar concerns. It covers:
- Retail establishments — stores, malls, warehouses, and similar
- Eateries, hotels, movie multiplexes, and amusement parks
- Amusement and entertainment venues
- Service organizations — finance, healthcare, pharma, hospitality, and similar
- IT companies
What Does the Shops Act Cover?
State-level Shops Acts are broadly similar and cover:
- Working hours
- Rest days and rest periods
- Paid annual leave (earned, sick, and casual leave)
- Wages and compensation
- Overtime
- Employment of children and women
Businesses covered under the Act have several obligations:
- Registering the business promptly
- Renewing the registration periodically
- Keeping the labour department updated on organizational changes, closures, and similar events
- Displaying public notices and certificates
- Issuing appointment letters
- Maintaining various registers and records
Consequences for Non-Compliance
Beyond laying out procedures, the Act also sets penalties and punishments for various offences.