Were you aware of the fact that anyone planning to start a business in India should be familiar with the provisions of the Shop and Establishment Act? Well, most businesses must register under the Shops and Establishments Act which is governed by state law, and each state has its own set of rules and regulations. Rules differ from state to state because they are framed by the state government. As a result, the rules of the state in which registration is sought must be followed. The Department of Labor regulates the Shop and Establishment Act, which governs premises where any trade, business, or profession is carried on.
Why Shop and Establishment Act is necessary?
The act governs not only commercial establishments but also societies, charitable trusts, printing establishments, for-profit educational institutions, and premises where banking, insurance, stock, or share brokerage is conducted. This act governs issues such as working hours, employee rest intervals, opening and closing hours, closed days, national and religious holidays, overtime work, rules for child labor, annual leave, maternity leave, sickness, casual leave, and so on.
Premises subject to the Shop and Establishment Act
The Shop and Establishment Act in India is promulgated by the state and may differ slightly from one state to the next. However, according to the Act, all shops and commercial establishments operating within each state are subject to the Shop & Establishments Act.
Shops are defined as premises where goods are sold either retail or wholesale, or where services are provided to customers, and include an office, a storeroom, a godown, a warehouse, a workhouse, or a workplace.
Shops, commercial establishments, residential hotels, restaurants, eating houses, theaters, and other places of public amusement or entertainment are all examples of establishments. Furthermore, establishments, as defined by the act, may include any other establishments defined by the government through a notification in the Official Gazette.
The Shop and Establishments Act governs certain aspects.
The Shop and Establishment Act governs several aspects of the operation of a shop or commercial establishment. The Shop and establishment act governs several key areas, including:
- Work hours Intervals for rest and meals
- Children’s employment is prohibited.
- Employing a young person or a woman
- Hours of operation and closure
- Days of closure
- Weekly vacations
- Wages for vacations
- Wage payment terms and conditions
- Compensation deductions
- Leave policies
- Dismissal
- Cleanliness
- ventilation and lighting
- Fire prevention measures
- Accidents
- Keeping records
A license under the Shops and Establishments Act
Any new shop or commercial establishment must apply to the Chief Inspector for a Shop and Establishments Act License within the timeframe specified. The name of the employer, address of the establishment, name of the establishment, category of the establishment, number of employees, and other relevant details as requested must be included in the application for a license in the prescribed form. The shop or commercial establishment will be registered after the application is submitted and reviewed by the Chief Inspector, and a registration certificate will be issued to the occupier. According to the act, the registration certificate must be prominently displayed at the shop or commercial establishment and must be renewed regularly
Shops and Establishments Act Applicability:
The Act’s primary goal is to protect the rights of both employers and employees. The Shop and Establishment Act generally governs wage payment, working hours, terms of service, holiday pay, leave policy, work conditions, overtime work, meal, and rest intervals, prohibition on hiring children, young people, or women, maternity leave, and benefits, opening and closing hours, closed days, weekly holiday, dismissal, cleanliness, lighting and ventilation, fire safety and precautions, accidents, record keeping, and so on.
The establishment covered by the Act must apply for registration in the prescribed form and pay the prescribed fees within 30 days of the establishment’s start date. The Shop and Establishment Act is governed by the state labor department. The shop or establishment submits the registration application to the local district labor officer. The concerned officer will issue the Shop and Establishment Act registration certificate once the application has been approved. As previously stated, the application process would differ from state to state.
All establishments subject to the Act must obtain registration and adhere to all of the rules and regulations outlined in the Act. The establishment would be liable to pay the penalty if it failed to obtain registration and follow the Act’s rules and regulations. The penalty amount would differ from one state to the next.
