The government of Karnataka has made the process of getting a Shops and Establishment License convenient by providing the facility of registration through an easily accessible online portal system. This portal can even be used for renewing of your license
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Karnataka has registered around 16,691 new businesses under the Shops and Establishment Act since April in 2020 when the lockdown was imposed. There has been nearly a 35% drop in the registration of businesses in 2020 when compared to the previous three years. This was revealed by a recent analysis of data provided by the Department of Labour. |
Shops and Establishment Act
Discover the intricacies of the Shops and Establishment Act, a pivotal regulatory framework designed by various State Governments to meticulously govern the working conditions of employees in diverse sectors such as shops, commercial undertakings, and restaurants. While the Weekly Holiday Act of 1942, established by the Central Government, outlines the mandatory grant of holidays, there exists no comprehensive Central Government legislation addressing critical aspects like working hours, wage payment, and health and safety standards in commercial establishments.
In response to this regulatory void, individual state Governments have taken the initiative to enact Shops and Establishment Acts. These localised legislations serve as essential tools to regulate the conduct of commercial establishments within their respective jurisdictions. Delve into the nuanced provisions of these state-specific acts and gain a deeper understanding of how they play a crucial role in shaping the landscape of work in India.
What Is Shops and Establishments Registration?
The term ‘Shops’ include offices, storerooms, godowns whether on the same premises or otherwise, used in connection with certain business or trade. Whereas, the term ‘Establishment’ means a commercial, trading, banking or insurance establishment, an enterprise or administrative facility in which working persons are primarily engaged in office work, a hotel, restaurant, boarding or dining room, a café or some other refreshment room, etc.
| Obtaining registration under the Shops and Establishments Act means that your business is licenced under the jurisdiction of your regional area under the enacted Law of the State Labor Department under the sanction Senior Labor Inspector. As a result, your organisation will be registered in the government register and its legal status will be protected. |
Who Needs to Register Under the Karnataka Shops and Establishments Act, 1961?
The following entities established in the state of Karnataka and its notifies areas must register within 30 days of its commencement of operation
- Each shop or establishment that carries trade, business or services
- Business entities such as stores, shopping centers, restaurants, hotels, theaters, public entertainment, retail, etc.
Regulations Under the Shops and Establishments Act
Karnataka Shops And Commercial Establishments Act, 1961 covers the administration of regular holidays, working hours, letter of appointment, employee attendance, etc.
The following are the main regulatory areas covered in the Act
- Issuance of registration certificate
- Filing of annual returns
- Extension of registration certificate
- Exemption on weekly holidays for shops and establishments
- Addition to registration certificate
- Exemption for women employed in the night shift
- Issuance of duplicate registration certificate
- Submission of application certificate
Benefits of Obtaining a Shop and Establishment Registration in Karnataka:
By registering, the owner of the shops or establishments can
- Easily open a current account
- Quickly get loans from banks or financial institutions
- Take advantage of the tax incentives, power tariff and state government exemptions
- Show evidence of your shop act registration when any State Government Labor Department or Municipality inspector comes to your office premises
- Undergo any registration/operation through the State government’s online portal system
Documents Required to Obtain Registration
To register under the Shops and Establishments License in Karnataka you need scanned copies of the documents listed below:
- Identity/address Proof of the owner (Aadhaar card/ driving license/voter ID etc.)
- Incorporation Certificate
- Memorandum of Article (in case of private ltd. company)
- The authorisation letter for the authorised signatory/self-attestation letter of the owner
- Challan/payment receipt /transaction Receipt
- Duly filled Registration form signed by owner/authorised signatory
The Procedure for Registration under the Shops and Establishments License In Karnataka
This is the website of Karnataka’s E-Labour Department for online registration/ renewal of Shops and Establishments License In Karnataka.
Step 1 – Navigate to the Labour Department’s official site. Here you must click on the ‘APPLY ONLINE’ option and thereafter click on the Shops and Commercial Establishments Act.
Now click on New Registrations and fill the form online, submit it. A username and password will be generated and sent to your mobile number
Step 2 – Fill and submit the application form online.
Step 3 – Take out a challan from any nationalised bank according to the registration fee outlined for the number of employees you employ. Make attachment of the necessary documents outlined above along with the bank challan
Step 4– You will now get an acknowledgement number generated/ Submit a physical copy of the online application form in the labour office of your regional circle. After verification by the Senior Labour Inspector, if everything is well, you will be granted the registration certificate
Registration Fees
You need to pay the registration fees according to the number of employees engaged in the organisation and they are calculated as follows –
| No. of employees | Fees (in Rupees) |
| Nil | 300 |
| 1 to 9 | 600 |
| 10 to 19 | 4000 |
| 20 to 49 | 10,000 |
| 50 to 99 | 20,0000 |
| 100 to 250 | 40,000 |
| 251 to 500 | 50,000 |
| 501 to 1000 | 70,000 |
| Above 1000 | 75,000 |
How to Check the Shops and Establishment Act Application Status?
After registration, if you want to check the status of your application. You can do so with the acknowledgment number provided to you.
Now you can enter your acknowledgement number and click on the search button. Another window will open displaying your
- Acknowledgment Number
- Shop or Establishment Name
- Proprietor Name
- Establishment Address
- Remark/ Status
Rules of Karnataka Shops and Commercial Establishments Act
The Karnataka Shops and Commercial Establishments Act, 1961 (KSCEA) is a law regulating the working conditions and hours of employees in shops and commercial establishments in the state of Karnataka, India. Here are some key rules of the Act:
Working Hours and Weekly Holidays
- Daily working hours: The maximum daily working hours are 9 hours for adults and 8 hours for young persons (between 14 and 18 years old).
- Weekly holidays: Every employee must be given a weekly holiday of not less than 24 consecutive hours.
- Spreadover: The spreadover (time between starting and finishing work) cannot exceed 12 hours in a day, including rest intervals.
Wages and Leave
- Minimum Wages: Minimum wages are fixed by the state government for different categories of employees.
- Overtime: Employees must be paid overtime compensation at double the usual rate for any work done beyond the daily or weekly limit.
- Annual Leave: Every employee is entitled to 15 days of annual leave with wages for every year of service.
Other Important Rules
- Child labour: Employing children below 14 years old is prohibited.
- Night work for women: Women cannot be required or allowed to work between 10 pm and 6 am except in certain exempted categories.
- Rest intervals: Employees must be given rest intervals of at least 30 minutes after every 5 hours of work.
- Maintenance of registers: Employers must maintain registers of employees, working hours, wages, and leave.
- Inspection and penalties: The Act empowers inspectors to inspect establishments and enforce its provisions. Violations of the Act can lead to penalties, including fines and imprisonment.
The Validity of Registration and Renewal
A license granted under the Act is valid for 5 years. You must renew your shops and establishments license In Karnataka every five-year period, i.e. once every 5 years. Please keep in mind that you must apply for renewal one month before your certification expires.
Establishment Exempted From Karnataka Shops and Establishment Act
Understanding the scope of the Karnataka Shops and Establishment Act is crucial for businesses operating within the state. Here’s a comprehensive breakdown of establishments that are exempt from the provisions of this legislation:
Exemptions for Specific Establishments:
- Offices under the Central or State Governments or Local Authorities (excluding commercial undertakings).
- Railway services, water transport services, postal, telegraph, or telephone services.
- Establishments related to public conservancy, sanitation, or those supplying power, light, or water to the public.
- Railway dining cars.
- Establishments for the treatment or care of the sick, infirm, or mentally unfit.
- Food Corporation of India establishments.
- Offices of legal and medical practitioners employing no more than three persons.
- Offices of banking companies.
- Persons employed in businesses mentioned in the above points.
- Persons in managerial positions in any establishment.
- Workers with inherently intermittent work, such as drivers, care-takers, watch and ward staff, or canvassers.
- Those engaged in preparatory or complementary work, such as clearing and forwarding clerks involved in goods dispatch.
Exclusions from Specific Sections:
The following establishments are exempt from particular sections of the Karnataka Shops and Establishment Act:
- Shops dealing mainly in medicines, medical or surgical requisites, or appliances.
- Clubs, residential hotels, boarding houses, hostels attached to schools or colleges, and establishments related to boarding schools.
- Stalls and refreshment rooms at transportation hubs.
- Barbers and hairdressers’ shops.
- Shops dealing mainly in specified goods like meat, fish, poultry, etc.
- Shops dealing in funeral-related articles.
- Shops dealing in pan, beedies or cigarettes, or liquid refreshments for on-premises consumption.
- Shops dealing in newspapers or periodicals.
- Cinemas, theatres, and places of public entertainment.
- Retail sale of petrol.
- Shops in regimental institutes, garrison shops, and troop canteens.
- Tanneries.
- Retail trade at exhibitions or shows (subsidiary or ancillary to the main purpose).
- Oil-mills and flour-mills not registered under the Factories Act, 1948.
- Brick and lime kilns.
- Commercial establishments engaged in the manufacture of bronze and brass utensils (limited to the process of melting in furnaces).
- Information technology establishments.
- Bio-technology and research centres or establishments for epidemic and other diseases.
Highlights of Karnataka Shops and Establishment Act
Check into the core facets of the Karnataka Shops and Establishment Act to grasp the essential features shaping the employment landscape within the state. Here’s an overview of the major aspects encapsulated by this legislation:
Employment of Child, Young Persons, and Women:
- Prohibition of child employment: The Act strictly prohibits the employment of individuals who have not completed fourteen years of age.
- Night work restrictions: Young persons (aged 14 to 18) and women are safeguarded against working during the night, whether as employees or in any other capacity.
Hours of Work:
- Daily and weekly limits: Employees are constrained to a maximum of nine working hours per day and forty-eight hours per week.
- Overtime compensation: Any work beyond the stipulated hours necessitates the provision of overtime wages.
- Intervals between work periods: The Act mandates fixed work periods with no interval exceeding five hours to ensure adequate rest.
Weekly Holiday:
- Mandatory closure: Every establishment in Karnataka must remain closed for one day each week.
- Employee rest day: Each employee is entitled to a full day of rest per week. Exceptions exist for establishments with ample additional staff, enabling them to operate throughout the week.
Annual Leave with Wages:
- Leave entitlement: Employees in Karnataka establishments are entitled to one day of leave with wages for every twenty days of work performed.
- Young persons’ leave: Young persons, specifically those aged 14 to 18, enjoy a more frequent leave allowance, with one day of leave with wages for every fifteen days of work.
These key provisions of the Karnataka Shops and Establishment Act underscore the state’s commitment to safeguarding the well-being of workers, promoting reasonable working hours, and fostering a healthy work-life balance. Employers and employees alike benefit from understanding and adhering to these crucial regulations that contribute to a fair and supportive work environment in Karnataka.
FAQs on Shop and Establishment Registration in Karnataka
How can I get a shop and establishment license in Karnataka?
Getting a shop and establishment license in Karnataka involves the following steps:
Eligibility: Ensure your establishment falls under the Act's purview.
Prepare documents: Gather required documents like ownership proof, address proof, identity proof, and employee details.
Form filling: Fill out the online application form (e-Karmika portal) for registration. Fee payment: Pay the applicable registration fee online.
Verification: The department will verify your application and documents.
License issuance: Upon successful verification, you'll receive the license electronically.
What is the shop and establishment rule in Karnataka?
The key rules of the Karnataka Shops and Commercial Establishments Act, 1961 (KSCEA) include:
Working hours: 9 hours/day for adults, 8 hours/day for young persons.
Weekly holidays: Minimum 24 consecutive hours.
Minimum wages: As per state government notifications.
Overtime: Double the usual rate for work beyond daily/weekly limits.
Annual leave: 15 days with wages for every year of service.
Child labour: Prohibited below 14 years.
Night work for women: Restricted between 10 pm and 6 am (with some exemptions).
Establishment registration: Mandatory for most shops and commercial establishments.
What is the Karnataka Shops and Establishment Act 2023?
There is no new Act in 2023. The current Act is the Karnataka Shops and Commercial Establishments Act, 1961, with various amendments made to date. The latest significant amendment came in 2016, raising the maximum daily working hours from 8 to 9 for adults.
What is the latest amendment in the Karnataka Shops and Establishment Act?
The latest amendment was in 2016, which primarily: Increased the maximum daily working hours for adults from 8 to 9. Introduced self-certification and third-party certification options for compliance with certain provisions. Clarified regulations for overtime calculation and compensation.
What is a shop establishment certificate in India?
A shop establishment certificate is a license issued by the relevant state government under the Shops and Establishments Act, authorizing an establishment to operate legally and ensuring compliance with labour laws regarding working conditions, wages, and employee welfare.
How do I register under the UP Shops and Establishment Act?
The process for registering under the UP Shops and Establishment Act is similar to Karnataka, involving online application, document submission, fee payment, verification, and license issuance. You can find the specific details and online portal on the official website of the Uttar Pradesh Department of Labour.
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