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Shops and Establishment

Employee Rights Under the Shop and Establishments Act

Look into the Shop and Establishments Act to uncover the rights and privileges it affords employees. This blog offers insights into the regulatory framework governing working conditions, leave, and other essential aspects, providing a comprehensive understanding of employee rights under this legislation.


When it comes to employees working in local shops and small businesses, many might not have formal job contracts. The crucial protection for these workers lies in the state-specific Shops and Commercial Establishment Acts. These laws play a vital role in ensuring that employees have rights and safeguards, even without a formal agreement. In this article, we’ll break down these Acts, making it easy for everyone to understand the various rights that these laws provide to employees working in unorganized sectors, offering a glimpse into the essential protections they deserve.

Hours of Work in Descent 

A person may not work for more than 48 hours in a week or 9 hours in a single day. However, employees might do overtime if (a) the total number of overtime hours worked by an employee does not exceed 50 per quarter, and (b) they are paid at twice the rate of normal hourly wages.

Rest and Meal Times Should be Spaced out Properly

There should be at least a half-hour break for every 5 hours of continuous work. Besides, the total time spent working, including his rest interval, can not exceed 10 hours per day.

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Conditions for Employing Young Persons

  • The minimum employable age is 14, below which is prohibited as child labor. A ‘young person’ is between fourteen to eighteen years old. 
  • The total work hours of a young person shall not exceed thirty hours per week or five hours per day, excluding the intervals taken for meals and rest. 
  • They should not be worked for more than three hours without at least half an hour of intervals.

Entitlement of ‘Day Off’ in a Week

As per Shop and Establishment License, no employee shall be required to work- (a) on a closed day (sanctioned holidays), of an establishment; (b) on one day in a week, in any other establishment; and (c) before the opening hour of the establishment and after closing hour of the establishment (If a watchman works even on an off day, he must be allowed another off day in the week.)

Right to Holidays or Double Wages 

Compulsory holidays to be sanctioned on (a) Independence day, Republic Day, and Mahatma Gandhi’s birthday and they shall be paid wages for the same; and (b) 3 other holidays (with wages) in a year in connection with officially declared festivals; and (c) Any employee required to work on any such holiday, he should be paid double his remuneration calculated per hour.

Right to Take Leave(s)

  • There may be 1 day’s earned leave for every 20 days of employment in a year. For young employees, the gap is every 15 days.
  • Anyone discharged or dismissed from employment or resigning during the year shall be entitled to wages instead of his unavailed leave(s).
  • The unavailed leaves of an employee in a year get added to his leaves in the next year, provided the total number of leaves being carried forward doesn’t exceed 30. (In the case of a young person, 40).
  • These leaves are beside the mandatory 7-day sick leaves and 7 days casual leave per year.

Period During Which the Wages Are to be Paid

  • There shall be a fixed period during which such wages shall be payable not exceeding one month.
  • The wages of every employee shall be paid within 7 days from the due date
  • In case of termination, the wages earned by an employer and the remuneration/wages fort unavailed leaves, shall be paid within 2 days. In case of resignation, such shall be paid within the next pay day.
  • Nonpayment of the above can result in a penalty compensation up to 8 times the amount of wages withheld.

Right to be Given Notice Before Removal

No employee can be removed except without one month’s prior notice. Except (a) if the employee is removed due to misconduct, or (b) If they haven’t been in the service for a continuous period of three months.

Removal without notice/pay can result in a penalty compensation to the employee equivalent to two month’s salary.

Conditions of Employment for Female Employees

No woman employee shall be required to work in an establishment during the night except if it is at a hospital, nursing or medical care center, old age home, infirmaries, orphanage, asylum, etc.  No employer of any establishment shall knowingly employ a woman in any establishment for six weeks following the day of her confinement or miscarriage.

Maternity Benefits

Every woman who continuously worked for a minimum period of 6 months preceding the date of her delivery, shall be entitled to receive a payment of maternity benefit from six weeks immediately preceding to six weeks following the delivery.


Besides the above rights, there are also some duties. For instance, an employee can terminate his employment only after giving to his employer a 7-day previous notice. Otherwise, the employer may forfeit the unpaid wages of 7 days. Get in touch with the experts at Vakilsearch to make sure you’re doing the best job possible when it comes to compliance.

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