Maharashtra Shops and Establishment Act, 2017

By Dezan Shira & Associates

Posted: 1st November 2017 08:49

The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 came into force on September 7, 2017. This replaces the Maharashtra Shops and Establishment Act of 1948.
Previously, the federal government enacted the Model Shops and Establishments Act in 2016 that revised the regulatory norms for operating commercial establishments in India. Following this, several states initiated legislation to implement the new rules in their respective state jurisdictions.

Maharashtra is the first state in India to implement the new Shops and Establishments law. The law is applicable to all commercial establishments in the state, (not covered under the Factories Act), which employ 10 or more workers.

Firms that employ more than 10 workers are mandated to register themselves under the Maharashtra Shops and Establishments Act. The registration can be done online, and all records will be maintained electronically. Further, the commercial entity can determine the validity period of its registration, which cannot exceed 10 years.
Key changes to the Maharashtra Shops and Establishment Act
The Act introduces significant reforms for the employment conditions for workers in the following areas:
Working hours– The state government will stipulate business hours for different categories of commercial establishments. Depending on the nature of their operations, some establishments may be allowed to operate 24/7.  The working hours for employees will not exceed nine hours per day and 48 hours per week. In case of exigencies, workers must not be required to work more than 12 hour in a day.

Protection of women– The Act prohibits the discrimination of women workers in matters of recruitment, training, promotion, and wages. Generally, women workers will be required to work only between 7 a.m. and 9:30 p.m. In emergencies, women may choose to work beyond these hours, provided the work space is safe and transport is made available for her to commute back to her residence.

Holidays and leave – The Act specifies that workers are eligible to eight casual leaves (CLs), and can accumulate 45 days of paid leave during a year. The establishment will declare eight days as paid festival holidays, including four national holidays. The other four festival holidays may be mutually agreed between the establishment and its workers.

Welfare of workers– The law makes it mandatory for the establishment to ensure adequate arrangements are made for the health and safety of workers. Cleanliness, hygiene, ventilation, and lighting also come under the definition of safety of workers.

Specifically, the law mentions the following safety measures:
Compliance and flexibility under the Maharashtra Shops and Establishments Act
The Act appoints facilitators to enforce its provisions. Facilitators will inspect the premises of registered establishments, review documents, and advice establishments towards complying with the norms. Any establishment that deviates from the standards and norms specified under the Shops and Establishment Act will be liable to a fine of US$1,535 (Rs 100,000).

However, it is useful to note that by not regulating the working conditions in firms engaging less than 10 workers, the Act provides significant compliance relief for micro, small, and medium sized firms (MSMEs).
Finally, responding to concerns raised by business associations, the Maharashtra state government has permitted different working hours for different categories of establishments. Malls, restaurants, movie theatres, and other recreational centers are likely to benefit the most from this move. 

This article was first published on India Briefing.

Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll, and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India, and ASEAN, we are your reliable partner for business expansion in this region and beyond.

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