Introduction
The Shops and Establishments Act, 1954 governs the functioning of retail outlets and commercial entities within each state’s jurisdiction. Though individual states enact their own versions of the Act, its core provisions remain consistent nationwide. The Labour Department of the respective state is responsible for implementing and overseeing this legislation.
Registration under The Shop and Establishment Act
- Name of the employer and manager (if applicable)
- Address of the establishment
- Name of the business (if any)
- Nature of the establishment (e.g. shop, commercial outlet, hotel, restaurant, theatre, entertainment venue)
- Total number of employees
- Any additional details required by rules
Once verified, the Chief Inspector will register the establishment and issue a certificate in the prescribed format. This certificate must be visibly displayed at the premises and periodically renewed as directed. In case of disagreement about the classification of an establishment, the matter is escalated to the Government for final resolution.
For compliance, the registration form and fee must be submitted within ninety days from the following dates:
| Type of Establishment | Starting Point of 90-Day Period |
|---|---|
| Existing establishments in notified urban and cantonment areas of Delhi | The date the Act takes effect in those areas |
| Existing establishments in regions notified under Section 1(4) | The date of notification enforcing the Act |
| New establishments in the above-mentioned areas | The date the business commences operations |
Standards / Condition of Premises
Establishments are required to maintain certain environmental and structural standards:
- Cleanliness : All premises must be kept hygienic and free from foul odors originating from drains or similar sources. Cleaning may include lime or color washing, painting, and disinfection at prescribed intervals.
- Lighting and Ventilation : Adequate lighting and ventilation must be ensured during working hours. Employers must also provide suitable arrangements for drinking water.
- Enforcement Authority : Inspectors are empowered to issue written directives for improvements in lighting, cleanliness, or ventilation, which must be implemented by the employer within the specified period. The Government may also establish minimum standards for such conditions.
- Fire Safety : Establishments must follow prescribed guidelines to safeguard against fire hazards, with exceptions only where specified by rule.
- Accident Compensation : The provisions of the Workmen’s Compensation Act, 1923, apply equally to employees of establishments under this Act.
Regulations on Employment and Working Hours
No adult may be employed for more than nine hours per day or forty-eight hours per week. Extended hours may be permitted under specific circumstances such as stocktaking, provided the weekly limit does not exceed fifty-four hours and total overtime in a year remains within 150 hours. Employers must notify the Chief Inspector in advance and pay overtime at double the regular hourly rate. The standard workday is considered eight hours for wage calculation.
Persons below a certain age may work no more than six hours a day and cannot be employed for more than three and a half hours consecutively without a break. The overall work duration, including rest periods, must not exceed eight hours.
Employment between 9:00 p.m. and 7:00 a.m. during summer, and between 8:00 p.m. and 8:00 a.m. in winter, is prohibited for young individuals and women, whether working full-time or part-time.
Benefits of Obtaining Shops and Establishment Registration
Legal and Commercial Recognition
- Confers official recognition to the business under applicable state regulations
- Enhances credibility among clients, suppliers, and lenders through legal compliance
Operational and Financial Benefits
- Supports eligibility for business loans and credit facilities
- Enables access to various government welfare schemes and subsidies
Employment and Regulatory Compliance
- Ensures fair labor practices regarding wages, hours, and leave policies
- Provides legal protection for employees
- Helps businesses avoid penalties by ensuring regulatory compliance
- Simplifies labor inspections conducted by authorities
Facilitating Growth and Expansion
- Eases the process of obtaining additional licenses when expanding operations
- Provides legal safeguards in case of employment or contractual disputes
- Aligns operations with state labor norms, avoiding administrative or legal complications
Obtain Registration for Your Shop Now
A shop refers to any premises where goods are sold either at retail or wholesale or where services are provided to customers. It includes spaces such as offices, storerooms, warehouses, or workshops associated with the business activity. However, it does not include factories or premises categorized as commercial establishments.
An establishment includes a variety of business or service outlets such as shops, commercial entities, residential hotels, restaurants, eateries, theatres, or any venue intended for public entertainment. The government may also designate additional entities as establishments through official notification under the Act.
A commercial establishment is any location where activities related to trade, business, or professional services are conducted. This includes societies under the Societies Registration Act, charitable or trust-based entities engaged in commercial operations, journalistic and printing offices, auditor and contractor offices, certain mines and quarries not covered under the Mines Act, and privately-run educational institutions. It also comprises premises used for banking, insurance, brokerage, and stock exchange activities. Notably, it excludes shops, factories registered under the Factories Act, and places meant for public recreation like theatres or restaurants.
The Act aims to safeguard and regulate working conditions for employees in shops and establishments within Delhi, particularly those in the unorganized sector. It complements the Industrial Disputes Act, 1947, by extending foundational workplace benefits and protections.
The Act applies across the entire National Capital Territory of Delhi, covering all shops and establishments operating within its jurisdiction.
Yes, every shop or establishment covered by the Act must register. Registration is a legal requirement for operating within the prescribed jurisdiction.
Shops and establishments must adhere to operational hours specified by the Government. They are prohibited from opening earlier or closing later than the times officially stipulated.
Yes, each shop and establishment must remain closed for one day every week. This provision ensures rest and operational uniformity.
Employees in shops and establishments may work for a maximum of nine hours per day and not more than forty-eight hours per week.
For adult workers, no continuous work session may exceed five hours. This must be followed by a rest or meal interval of at least thirty minutes.
Young persons are permitted to work up to six hours per day. However, their work duration should not exceed three and a half hours at a stretch without a mandatory half-hour break.
Employers are required to set wage periods that do not exceed one month. Wages must be disbursed within seven days following the end of each wage period.
No. Children under the age of twelve are prohibited from employment within shops or establishments, as per Section 12 of the Act.
No. Women and young persons are not allowed to work between 9:00 PM to 7:00 AM during the summer, and from 8:00 PM to 8:00 AM in the winter season.