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Introduction
On 29 August 2025, the Government of Punjab introduced the Punjab Shops and Commercial Establishments (Amendment) Act, 2025, (Amendment), (to access the amendment click here) amending the Punjab Shops and Commercial Establishments Act, 1958 (Punjab S&E Act).
The Amendment inter alia introduces relaxed thresholds for applicability of the Punjab S&E Act, stricter penalties and a compounding mechanism, leading to a significant shift in regulating shops and commercial establishments in the State of Punjab.
Key Changes introduced by the Amendment
- Threshold based Applicability
The Punjab S&E Act was earlier applicable to all the shops and commercial establishments, irrespective of the number of workers engaged by them. However, the Amendment now requires only shops and commercial establishments employing 20 or more workers to comply with the provisions of the Punjab S&E Act and thereby apply to the Inspector in the prescribed form and obtain a registration certificate.
Such shops and commercial establishments are now required to obtain the registration certificate within 6 months of the commencement of their business, as opposed to 30 days under the Punjab S&E Act.
Pursuant the Amendment, shops and commercial establishments employing less than 20 workers are now only required to give an intimation in the prescribed form of commencement of their business to the Inspector within six months of the date of commencement of the Amendment or within six months of the date of commencement of business. Consequently, the provisions of Punjab S&E Act will no longer be applicable to such small establishments.
- Hours of Work
The working hours and the overtime threshold, via the Amendment, have also been revised as follows:
| Provision | Limit as per Punjab S&E Act | Revised limit as per the Amendment |
| Daily Working Hours (i.e., Section 7) | 9 Hours | 10 hours |
| Spread over of Hours (i.e., Section 8) | 10 hours | 12 hours |
| Overtime Hours in a Quarter (i.e., Section 7(2)(a)) | 50 hours / Quarter | 144 hours / Quarter |
- Increased penalties
The Amendment has revised the penalties under the Punjab S&E Act, as follows:
| Provision | Penalty as per Punjab S&E Act | Revised Penalty as per the Amendment |
| General Penalty (i.e., Section 26) | Upto INR 100 (First Offence); and Upto INR 300 (Subsequent Offence) | INR 500 upto INR 2,000 (First Offence); and INR 3,000 upto INR 30,000 (Subsequent Offence) |
| Hours of work for young persons (i.e., Section 6) | INR 50 upto INR 200 | INR 1,000 upto INR 25,000 (First Offence); and INR 5,000 upto INR 50,000 (Subsequent Offence) |
| Obstruction to Inspectors (i.e., Section 21) | INR 25 upto INR 200 | INR 1,000 upto INR 10,000 (First Offence); and INR 3,000 upto INR 50,000 (Second Offence) |
- Compounding of offences
The Amendment has also introduced a provision for compounding of offences for any offence committed under Section 6 (conditions of employment of young persons), Section 20 (record-keeping), Section 21 (inspection of registers and calling of information) and Section 26 (general penalties).
Further, the Amendment provides that the compounding amount shall not exceed the maximum fine ought to be imposed under the respective sections. Once the offence has been compounded, the relevant authority shall not continue with further proceedings against the offender.
Conclusion
The Amendment marks a progressive shift in the State's approach to labour regulation. By introducing threshold-based applicability, extending working hour limits, enhancing penalties, and enabling compounding of offences, the Amendment seeks to balance regulatory oversight with ease of doing business—particularly favouring small enterprises. Accordingly, employers should review their compliance practices to align with the revised provisions and avoid potential 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.
