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Shops and Establishment

Shop and Establishment Act Compliance Checklist

Compliance is a normal term that indicates adherence to rules and laws. Each law/statute provides a list of compliances in the form of filing up returns, submitting applications and forms, paying requisite fees etc., which need to be maintained as a sign of adherence to that law. Regular and updated compliance ensures hassle-free transactions for every organization.

This article is about the compliance checklist provided for shops and established laws in India. Each business organization owning a Shops Act license must undergo these compliance requirements to keep themselves updated with the legal nuances of the statue. 

 Compliance Checklist Required Under the Shops Act

  1. Whether falling into the definition of establishment?
  2. If yes, whether the registration has been obtained within 30 days of the commencement of the business
  3. Whether any change in the particulars supplied at the time of registration is being communicated to the Inspector?
  4. Whether the opening hours, closing hours, intervals for rest, weekly holidays are in accordance with & in compliance with provisions of Chapter III of the Act? 
  5. Whether the employment of children, young persons, or women, if any, is being made in accordance with the provisions of Chapter VI? 
  6. Whether provisions of leave & payment of wages in accordance with Chapter VII? Whether provisions of health & safety in accordance with Chapter VIII? 
  7. Whether registers & records are being maintained in the appropriate form in accordance with the Shop Act License Rules, 1961? 
  8. Whether wages for overtime work being paid in accordance with?
  9. Whether notice of termination of service of an employee who has been in continuous employment in compliance with Sec.66? 
  10. Whether an intimation application has been submitted to the inspector in case of an establishment with less than 10 employees. 
  11. Whether the following registers are being duly maintained, that is the register of employees, the register of wages and deductions of employees, etc. 
  12. Whether no child labor employment of any individual under the age of 14 years is enaged.
  13. Whether any woman entitled to maternity benefit has been paid the bonus within one week of the date of her delivery. 
  14. Whether the registration certificate needs any amendment and if so whether the notice for the same in the prescribed form has been submitted to the inspector
  15. Whether the establishment is kept clean and dirt-free, sufficiently lighted, and properly ventilated. 
  16. Whether sufficiently filtered water fit for human consumption has been stored safely and inadequate amounts at some hygienic place?
  17. Whether a clean and sanitized spittoon covered with sand and lime or with a disinfectant liquid provided?
  18. Are the suitable devices for cutting off power in emergency situations for running machinery provided?
  19. Whether tight fitting clothes provided to the workers working near the machinery?
  20. Whether emergency exit in case of fire or disasters provided?
  21. Whether a first-aid box equipped with prescribed contents provided?
  22. Whether the employees are thoroughly made to undergo a full-body medical check-up by a certified surgeon or a doctor of the civil dispensary at least once a year and examination or diagnostic reports regarding their diseases are maintained as records and made available?
  23. Whether effective means of drainage has been provided?

 Importance of Statutory Compliance

  1. With compliance, a lot of factors related to a company are attached. For instance, if a company suffers non-compliance related to the TDS, the company’s reputation is put at stake. The existing employees start doubting the efficiency of the company and the potential employees may not even join because of this.
  2. One of the biggest reasons for statutory compliance is to offer equal treatment to every employee of the organization. This equality comes from many of the laws and rules mentioned above in the checklist. Many times, different workers are made to work different hours, and other times, wages differ based on multiple factors. To avoid this, statutory compliance offers a clear pathway.
  3. Due to statutory compliance, there are clear guidelines for tax payments. This not only helps the taxpayers to pay tax on a timely basis but also allows the tax collectors to easily collect due tax on a timely basis.
  4. If statutory compliance is not maintained, customer loyalty is severely hampered. Just as employees start doubting the organization for poor compliance structure, customers are also unwilling to work with organizations that have a poor statutory compliance structure.
  5. Another big reason for maintaining statutory compliance is financial losses. When non-compliance penalties and fines are imposed on an organization, financial losses follow. This can disrupt the cash flow to a great extent.


However, even such an exhaustive list of compliances leaves us with several doubts and ambiguities at the end of the day. For relatively newer genres of organizations, like IT/home-based freelancing business, or BPO, the question is, how are you maintaining the records? Whether through software or manual??? If software maintenance, have you taken exemption from labour dept? If not, why? Hence, compliance can often become essential, yet complicated. Contact our experts at Vakilsearch to have a detailed idea and step-wise guidance on updated compliance requirements under the shop act.


What is the Shop and Establishment Act Compliance Checklist?

It's a detailed list of legal and procedural requirements businesses must follow to comply with the Shop and Establishment Act, ensuring proper operation and protection of workers' rights.

What is the significance of HR compliance within the Shop and Establishment Act?

HR compliance within the Act is crucial for safeguarding employee rights, work conditions, and ensuring adherence to labor laws, which contributes to a fair and productive work environment.

What statutory requirements are covered by the Shop and Establishment Act?

The Shop and Establishment Act covers provisions related to working hours, overtime, leave policies, holidays, and various employment conditions.

How can I ensure statutory compliance in my shop or establishment?

To ensure statutory compliance, businesses should regularly review and update policies and practices, monitor changes in labor laws, and maintain meticulous records.

What are the essential documents required for statutory compliance under this Act?

Key documents include registration certificates, attendance records, leave registers, and inspection reports, which demonstrate compliance with the Act.

What is the difference between statutory compliance in a factory and a shop or establishment?

While both require adherence to labor laws, factories have additional safety and health regulations, like the Factories Act, while shops or establishments focus on employment conditions.

What is an HR audit checklist, and how does it tie into Shop and Establishment Act compliance?

An HR audit checklist assesses HR functions and practices to ensure they align with the Act's requirements, helping businesses identify and rectify non-compliance issues.

Can you explain the importance of payroll compliance in relation to the Act?

Payroll compliance is integral to the Act, ensuring timely salary payments, overtime calculations, and adherence to minimum wage laws, which underpin fair employment practices.

What are the key components of a comprehensive compliance plan for the Shop and Establishment Act?

A comprehensive plan involves creating policies, conducting regular audits, and keeping up with changes in labor laws, aiming to maintain full compliance with the Shop and Establishment Act.

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