Policies Shops and Establishment Act

What are the policies that should be maintained in a company that is covered by the Shops and Establishment Act?


The Shops and Establishment Act was established to protect the rights of employees in commercial establishments like business houses, offices, stores, warehouses, hotels, amusement parks, theatres, etc., nationwide. The provisions of the Act form one of the most important regulations required to be complied with by businesses. Every state has framed its own separate Shops and Establishment Act. However, the scope of the Act is similar across the nation, barring a few minor changes from state to state.

The Shops and Establishment Act regulates the following areas:

– Working hours

– Rest intervals for employees

– Overtime eligibility

– Leave Policy

– Opening and Closing hours of the establishment

– Weekly holidays, national and religious holidays

– Wages for holidays

– Annual, Casual, Maternity, and Sick leave

– Time and conditions for payment of wages

– Deduction of Wages

– Termination conditions

– Cleanliness, lighting, and ventilation of premises

– Precautions against fire

– Prohibition of employment of children

– Employment of young persons or women

– Maintaining various records/registers

– Display of Notices-Certificates

The establishments that are registered under the Shops and Establishment Act have to frame certain policies that will enable them to comply with all the regulations of the Act.  Failure to do so will attract penalties and other penal actions.

This article articulates the policies and actions to be taken by establishments that are registered under the Shops and Establishment Act.


Any company or establishment that is subject to come under the rules of the Shops and Establishment Act has to register with the Labour Department. These registrations have to be made within the days mentioned in the Act and this would differ from state to state. In some states, the registration has to be obtained within 30 days of the commencement of business, whereas, in some other states it is 60, 90, or even 180 days from the commencement of business.

Hours of Business – Opening and Closing hours:

This should be fixed in accordance with the provisions of Chapter III of the Act. Typically the Act specifies that an employee has to work for 48 hours a week and shall not work for more than 9 hours in a day.  This may vary from state to state.

Weekly, National, and Religious Holidays:

The Act provides for at least one-day weekly holiday. In addition to this, the employees are eligible for Casual Leave, Annual Leave, Sick Leave, and Maternity Leave as per the provisions of the Act in the states.

National Holidays may be common across the states but the Religious holidays may vary from state to state. A proper leave policy has to be maintained by the establishment.

Payment of Wages:

The Act provides that the employees are paid their wages on time and as per the employment contract. In addition to this paid leave can be availed by employees and this includes Annual Leave, Sick Leave, and Maternity Leave. Typically, employees are eligible for at least 12 days of paid leave per year and this may vary from state to state.

Overtime Wages:

Employees who work for extra hours are eligible for overtime wages and this should be paid in accordance with the rules.

Deduction of Wages:

Wage deduction policies should be as per the rules framed in the Act for such deductions.

Termination from Service:

Proper policies have to be framed as per Sec.66 the Act for Termination of Employees.

Employment of Children

The Act has provisions for the employment of children and this should be properly reflected in the policies of the establishment.

Employment of young persons and Women:

As per the Shops & Establishments Act, there are strict rules regarding the employment of young persons and women. These mostly pertain to the number of hours and working hours. These policies should be strictly maintained by the establishment.

Register and Records:

Specific Registers and records have to be properly maintained as per the Act. These include the Register of Employees, Register of Wages and Deductions, etc.

Cleanliness, Lighting, and ventilation of the premises:

The Establishment has to maintain a clean and dust-free workplace. Proper ventilation has to be provided on the premises with adequate lighting. The Act mandates that a safe and secure work atmosphere is provided to the employee.

Provisions for Fire Emergency

The Act envisages the need for having emergency exits in the event of fire risks.

Full-body Medical check-up:

All employees should undergo a full-body medical check-up by a certified surgeon or doctor at least once a year. These records have to be properly maintained.


Any establishment that comes under the purview of the Shops & Establishment Act has to strictly adhere to the rules and regulations, failing which they will be penalized.

These may be in the form of fines or in some cases imprisonment. Contravening these rules is a serious offense and it is therefore in the interest of the establishment to have clear policies that enable full compliance.

GetifyHR is one of the premier establishments providing strong support in managing Payroll and HR management through a well-established outsourcing module. With years of experience in this industry, we have provided exemplary service to our clients across the country. We have very effectively implemented all the requirements of the Shops and Establishment Act in our module and this has enabled our clients to be fully compliant with all the rules and regulations of the Act. This is an association that will enable you to conduct your business in a stress-free manner and thereby not only promote greater growth but also create a more harmonious workplace.