The Karnataka Shops and Commercial Establishments Act,1961

Summary

The Karnataka Shops & Commercial Establishment Act, 1961 and Rules, 1963 (“S & E Laws”) are applicable to all the shops and commercial establishments in the areas notified by Government of Karnataka.

The Act is enacted for the purpose of protecting the rights of employees.

The Act provides regulations of the payment of wages, terms of services, work hours, rest intervals, overtime work, opening and closing hours, closed days, holidays, leaves, maternity leave and benefits, work conditions, rules for employment of children, records maintenance, etc.

Key Definitions

“Shop” means any premises where any trade or business is carried on or where services are rendered to customers and includes offices, storerooms, godowns, warehouses, whether in the same premises or otherwise, used in such connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory.

“Commercial Establishment” means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a café or any other refreshment house, a theatre or any other place of public amusement or entertainment.

Registration

  • Each owner, within 30 days from starting the business shall submit application form in form ‘A’ to register the establishment.
  • Registration certificate must be displayed on visible place inside the office premises.
  • Registration certificate is valid for a period of five (05) years. Before the expiry of the period, renewal application to be submitted for the next period.
  • It shall be the duty of an employer to notify to the registration authority, in the prescribed form, any change with respect to any information contained in his statement during registration/renewal within 15 days after the change. Ex. Change in address, change in ownership, change in number of employees, etc.
  • After closing the business of the establishment, owner should surrender the registration certificate to the registration authority.

Benefits of Registration

The establishment -

  • will have a legal identity to conduct business with the territory.
  • can avail benefits under various Government schemes.
  • can operate business bank accounts.

Exemptions from Registration

The organizations that are exempted from registration under this Act are:

  • Offices of, or under the central or state Government, or local authorities, except commercial undertaking.
  • Any railway service, water transport service, postal, telegraph or telephone service, any system of public conservation or sanitation or any industry, or services like water, power, light to the public.
  • Railway dining cars .
  • Establishments for the treatment or care of the handicap or mentally unfit.
  • Establishments of the food corporation of India.
  • Offices of legal practitioners and medical practitioners in which not more than 3 persons are employed.
  • Offices of bank.

Compliances

References

Notifications

Karnataka Government limits work hours under the Shops and Establishments Act

20 Jul, 2021
The Karnataka Government has amended the work hours under the provisions of the Shops and Establishments Act. As per the amendment, no employee in any establishment shall be required or allowed to work for more than nine hours on any day and forty-eight hours in any week and the total number of hours of work including overtime shall not exceed ten hours in any day except on the day of stock-taking and preparation of accounts. Further the total number of overtime hours worked by an employee not to exceed fifty hours in a period of three continuous months.
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Karnataka Government advises employers, landlords to be liberal during COVID 19 curfew

28 Apr, 2021
The Government requests the employers not to terminate or reduce the wages of their employees during the COVID 19 lockdown. It also requests all the landlords not to forcefully vacate their tenants in this tough times.

Karnataka Shops and Establishments amends the Annual Leave carry forward from 30 to 45 days

19 Feb, 2021
The Karnataka Government, under the Shops & Commercial Establishments Act, amended the carry forward limit of the annual leave from 30 days to 45 days now.

Karnataka Shops and Establishments permitted to remain open 24x7 for next 3 years

02 Jan, 2021
The Karnataka Shops and Commercial Establishments employing 10 or more persons to be open on 24 x 7 basis on all days of the year for a period of 3 years with effect from 2nd January 2021.

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