Bihar Repeals Shops and Establishments Act: Will Other States Follow Through?

The Bihar government has repealed the Bihar Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2025, through the Bihar Shops and Establishments (Regulation of Employment and Conditions of Service) (Repeal) Ordinance, 2026, which came into effect immediately on June 1, 2026.

The move makes Bihar the first state to formally repeal its standalone Shops and Establishments (S&E) law following the implementation of India’s labor codes, raising questions about whether other states could adopt a similar approach.

Why did Bihar repeal the Shops and Establishments Act?

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The state government has repealed the S&E Act because the Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC, 2020), which came into force on November 21, 2025, already covers many of the same subjects regulated under the Bihar S&E Act.

The ordinance states that maintaining two laws governing similar matters resulted in overlapping provisions. By repealing the state Act, Bihar aims to do the following:

• Eliminate overlapping regulatory requirements
• Simplify the legal framework for businesses
• Encourage industrial investment
• Support faster industrial and economic development in the state

The ordinance also contains a savings clause, meaning that any proceedings initiated under the repealed act before June 1, 2026, will continue as though the act had not been repealed.

What replaces the Bihar S&E Act?

The repeal does not mean that shops and commercial establishments in Bihar are no longer regulated.

Instead, establishments are now primarily governed by the Bihar OSHWC Rules, 2025, framed under the OSHWC Code, 2020.

As a result, employment conditions that were previously governed under the Bihar S&E Act are now administered through the labor code framework.

Key employer compliance requirements under the Bihar OSH Rules, 2025

Although the regulatory framework has changed, employers must continue to comply with several workplace obligations under the Bihar OSH Rules.

Electronic registration

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All covered establishments must obtain registration through the designated online portal. Registration certificates will be issued electronically. If the authority does not process an application within seven days, the registration will be automatically deemed approved. Employers must also update changes in ownership or management within 30 days.

Appointment letters

Employers must issue appointment letters containing prescribed information, including the following:

1. Employee details
2. Establishment registration number/LIN
3. UAN and ESIC number, where applicable
4. Designation
5. Minimum wage and allowances
6. Date of joining
7. Nature of duties
8. Employment category (permanent, temporary, fixed-term, contract, casual, etc.).

Identity cards

Identity cards must be issued to all workers (other than daily-rated workers), specifying employee and establishment details.

Working hours and overtime

The rules continue to regulate the following:

1. Maximum working hours of 48 hours per week
2. Overtime eligibility after prescribed daily working hours
3. Maximum spread-over of 12 hours per day
4. Mandatory rest intervals after six hours of continuous work
5. Overtime limits of 144 hours per quarter, subject to the worker’s written consent

Weekly holidays

Employees remain entitled to at least one holiday per week. Where employees work on the notified weekly rest day, employers must provide a substituted holiday together with applicable overtime wages.

Workplace health and safety

The rules also prescribe obligations relating to:

1. Annual medical examinations for eligible workers
2. Accident and occupational disease reporting
3. Maintenance of statutory registers and records
4. Display of statutory notices
5. Safeguards for employing women during night shifts

Will other Indian states follow Bihar’s labor law approach?

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Bihar is the first state to formally repeal its standalone S&E legislation after the labor codes became operational.

Several states/union territory, such as Arunachal Pradesh, Gujarat, Manipur, Meghalaya, and Lakshwadeep, have already framed rules under the OSHWC Code while retaining their Shops and Establishments Acts. Bihar’s decision signals a different regulatory approach—one that seeks to consolidate employment regulation under the labor code framework and eliminate overlapping state legislation.

Whether other states adopt a similar model will depend on their existing labor laws, implementation of the labor codes, and state-level policy priorities.

Key takeaway

The repeal of the Bihar S&E Act should not be viewed as labor deregulation. Rather, it represents a transition from a standalone state law to a unified compliance framework under the OSHWC Code, 2020, and the Bihar OSHWC Rules, 2025.

For firms operating in Bihar, compliance obligations relating to employee registration, appointment letters, working hours, overtime, workplace safety, statutory records, and employee welfare continue to apply.

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