India: Maharashtra Welcomes A New Shops And Establishments Legislation

Last Updated: 13 November 2017
Article by   Trilegal

The Maharashtra government has published the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 to replace the existing shops and establishment legislation. This new law, which is yet to come into force, introduces provisions on crèche facilities, casual leave and electronic records and registers.


The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (New Act) was published in the Maharashtra Official Gazette on 7 September 2017. The New Act has received the Governor's assent and will come into force on such date as notified by the State government. Once in force, the New Act will replace the 60-year old Maharashtra Shops and Establishments Act, 1948 (1948 Act).

The State government has reformed the existing law to align it with the Centre's initiatives on 'ease of doing business' and digitization. The New Act largely draws its provisions from the Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016 (Model Bill), which was approved by the Union Cabinet in 2016. Though not a binding requirement, State governments were expected to either adopt the Model Bill, or adapt their existing laws to it, after accounting for regional requirements. Maharashtra is the first State to modify its shops and establishments legislation based on the Model Bill.


Applicability of the New Act

1. Substantive provisions would not apply to small establishments

Substantive provisions around working hours, leave, holidays, opening and closing hours, etc., would not apply to small establishments i.e. establishments employing less than 10 workers. Such establishments would only need to send an intimation regarding the commencement of their business to the authority designated under the New Act, allowing for greater flexibility in their operations.

2. The New Act would be applicable to all establishments in Maharashtra

While the applicability of the 1948 Act is limited only to local areas specified in Schedule I of that Act, the New Act would apply to all establishments in Maharashtra.

3. Applicability of the New Act would be limited to 'worker'

The 1948 Act extends to every 'employee'. Under the New Act, the term 'employee' has been replaced with the term 'worker' and the definition has also changed significantly. 'Worker' under the New Act has been defined on the same lines as the term 'workman' under the Industrial Disputes Act, 1947 (ID Act). Persons in 'positions of confidential, managerial or supervisory character' would not be included within the definition of 'workers', and employers would be required to list out such individuals on their website or other conspicuous place in their establishment. Employers would also have to send a list of such persons to the specified authority. Further, while the 1948 Act applies even to individuals 'employed through an agency' (i.e. contract workers), the New Act would be limited to workers directly 'employed' by the establishment.

Increase in the number of days of leave and holidays

While the New Act would decrease the entitlement to annual leave, it will increase the accumulation limit to 45 days (from the current 42 days). The New Act has also introduced provisions on casual leave that are missing from the 1948 Act. The number of national and festival holidays would also be doubled from 4 to 8 days.

Increase in the overtime limit

Under the New Act, a worker would be able to work overtime for a maximum of 125 hours in a period of 3 months. This is a significant increase from the 1948 Act, under which employees can work overtime for a maximum of 3 hours per week, i.e., about 36 to 40 hours in a period of 3 months.

Obligation to provide crèche facilities

Under the New Act, crèche facilities with suitable rooms would have to be provided in every establishment with 50 or more workers. An option has been given to a group of establishments to provide common crèche facilities within a radius of 1 km, with the approval of the designated authority.

Certain exemptions that are given to IT/ITeS establishments under the 1948 Act will be extended to all establishments

All establishments would be able to remain open on all 7 days of the week so long as every worker is given a weekly holiday. Further, all establishments will be able to employ women in night-shifts if suitable measures for their protection and transportation are taken.

Compliance moved to electronic mode

In line with the Centre's initiatives on 'ease of doing business', the New Act provides for registration and maintenance of registers/records electronically. Inspections will also be done based on a randomized web-generated inspection schedule and will not be at the discretion of the labour authorities.

Significant increase in fines

While the maximum penalty under the 1948 Act is a fine of INR 15,000 (USD 230), fines under the New Act can go up to INR 5,00,000 (USD 7,700). The New Act also provides for imprisonment in certain cases. However, opportunity would be given to employers to compound a first-time offense.


Displaying a list of employees in managerial and supervisory role will be a challenge for most organisations

Based on judicial precedents under the ID Act, an assessment of whether an employee is engaged in a confidential, supervisory or managerial role can be quite complex and would depend on the specific roles and responsibilities of an employee. Further, change in job roles and the consequent reclassification of an employee would require such a list to be updated regularly. If the employer fails to display or regularly update the list, persons employed in managerial or supervisory roles could possibly be covered by the provisions of the New Act.

It is also not clear if the requirement is to list the names of persons employed in such capacities or to merely notify the designations/positions of confidential, managerial or supervisory character.

Provision on accrual of annual leave could pose HR challenges

The provisions of the New Act relating to privilege leave are drafted in a manner that a worker would be entitled to 30 days of leave in the first year of employment and 18 days of leave in the subsequent years. Complying with such a provision could pose challenges from a Human Resources (HR) perspective since employers would have to carefully track the joining date of each worker, and accordingly provide leave entitlements. Further, it may also be difficult for employers to communicate to employees that their leave entitlement would reduce in subsequent years. This could lead to a situation where employers extend 30 days of privilege leave to all workers in order to avoid such HR issues.

Provisions regarding weekly holiday could be misused

Under the 1948 Act, every employee is entitled to a weekly day off, with the employer being prohibited from having an employee work during such weekly holiday. Although the New Act also mandates that workers are provided a weekly holiday, employers could have them work on their weekly holiday if a compensatory day off is provided within 2 months. Consequently, a worker may be required to work continuously for 2 months without any off day.

Onerous provisions on crèche

The recent amendments to the Maternity Benefit Act (MB Act Amendment) ( Refer to our previous newsletter) introduced the requirement to provide crèche facilities. Pursuant to the MB Act Amendment, the government is required to prescribe the distance within which crèche facilities are to be provided. The New Act however makes it mandatory for crèche facilities to be inside the establishment, with the exception that if an approval has been obtained from the prescribed authority, a group of establishments can provide common crèche facilities within a radius of 1 km. This is therefore likely to be more onerous than the requirement under the MB Act.

No provision on termination of service

Unlike the 1948 Act, the New Act does not contain any provision around termination of service of an employee. This may be a deliberate omission, since the definition of 'worker' under the New Act is aligned with the definition of 'workman' under the ID Act, and the ID Act already contains elaborate provisions relating to retrenchment.

No provisions around applicability of other statutes

The 1948 Act extends the provisions of the Industrial Employment (Standing Orders) Act, 1946 (SO Act) and Employees' Compensation Act, 1923 to establishments and employees covered by the 1948 Act. Presently, commercial establishments with 50 or more employees are required to comply with the SO Act. However, the New Act does not contain similar provisions relating to the applicability of these statutes to the establishments covered by it, which may change the compliance landscape when the New Act comes into force.


Once the New Act comes into force, it will provide establishments with greater flexibility in managing their compliances using electronic methods. However, some provisions such as, crèche, displaying list of persons and computation of leave may pose compliance challenges for employers. There would also be a greater onus on employers to ensure that compliances are up to the mark under the risk of significantly larger penalties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.