What Is Shop & Establishment Compliance, and Why Is It Important?

September 4, 2021
What Is Shop & Establishment Compliance and Why Is It Important


Business owners involved with any commercial establishments such as shops, restaurants, recreation facilities, and hotels, among others, need to register mandatorily and apply for a shop and establishment license. Falling under the department of labor and controlled by the state government, the shops and establishments Act applies to all premises where services are offered to customers.

Offices, warehouses, stores, and various other commercial premises are required to comply with the regulations and stipulations under the Shop and Establishment Act in India.

Various Establishments that are required to Adhere to Labor Law Compliance

All stores, commercial establishments, and other premises or organizations that offer products or services to customers must get themselves registered under the shop and establishment Act. Entities associated with any business activity are required to meet labor law compliance and contract labor compliance. The following are a few of the major entities that are mandatorily required to follow this:

  • Shops – retail as well as wholesale
  • Office and other premises that provide any service to customers
  • Storages, warehouses, and rental premises
  • All types of commercial establishments
  • Any workplace that is used for business purposes
  • Eateries and other places that serve food and beverages
  • Hotels and lodging houses
  • Recreation and entertainment services such as movie houses or theaters

Implementation of the Shop and Establishment Act

With the view of streamlining the various activities involved in business premises and ensuring the welfare of the employees and customers, the Government of India has put forward certain stipulations. To run any shop or organization in India for business purposes, meeting HR statutory Compliance and Labor law compliance is crucial. The following are a few of the key aspects covered by this Act:

  • Regulation of working hours and working conditions of the employees
  • Providing necessary rights and privileges to the employees and imposing certain obligations on the employers as well as employees
  • Prohibition of child labor
  • Major aspects that ensure the welfare of employees, such as hours of work, payment of wages or salaries, leave policy, hygiene and sanitary conditions related to the workplace, and essential precautions against potential risks.
  • Record of all activities and accounts
  • Labor law compliance

(Read More: Implementing Statutory Compliance with 5 Simple Steps)

Registration under the Shop and Establishment Act

The major processes related to applying for registration under the shop and establishment Act are as follows:

  • An application to get registration must be submitted within 30 working days of commencing the business – this may be done either in person or by online means.
  • All relevant and necessary documents need to be submitted, and the appropriate fee as fixed by the government must be paid.
  • The chief inspector will issue the registration certificate after proper scrutiny of the documents and, if needed, the business premises.
  • After getting the registration certificate from the concerned state government, it has to be displayed prominently at a visible place in the business premises.
  • The registration certificate has to be renewed at the prescribed intervals.
  • The individual or the organization that has acquired the registration certificate shall adhere to the regulations and stipulations.

Benefits of Joining Hands with Professional HR Service Providers

By partnering with experienced HR Solution providers such as TalentPro India, businesses of all types and sizes can meet the various crucial governmental demands such as labor law compliance, HR statutory compliance, and other regulations. The legal liability and risk related to the failure of compliance with such critical obligations can be eliminated by delegating your HR-related processes to reliable HR service agencies. (Read more: Need and Importance Of Statutory Compliance)


The shop and establishment Act primarily aims at providing an individual or an entity the required legal identity and approval for carrying on a business or trade. It ensures the welfare of the employees and the public who make use of the services as well.[/vc_column_text][/vc_column][/vc_row]

Share this post