Gujarat Updates Labor Rules for Shops & Commercial Establishments: What You Need to Know

January 14, 2026 Posted by India Briefing Written by Yanyan Shang Reading Time: 5 minutes

Gujarat has enacted a 2025 ordinance to update its Shops and Establishments framework, with the objective of aligning labor regulations with evolving business requirements while maintaining employee safeguards.

The ordinance revises key compliance provisions, including higher applicability thresholds for smaller establishments and enhanced operational flexibility for larger employers.

India’s eastern state of Gujarat has introduced a 2025 ordinance amending the Shops and Establishments framework, bringing changes to applicability thresholds, working and overtime hours, and conditions governing women’s employment, including night shifts subject to prescribed safeguards. The amendments reshape compliance obligations for businesses operating in the state.

Formally notified as Ordinance No. 3 of 2025, the changes update the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019. The ordinance revises several core compliance parameters, including employee thresholds for coverage, permissible working hours, overtime limits, and safeguards for women employees, as part of the state government’s broader effort to modernize labor regulations.

The revised framework adopts a balanced policy approach. It eases regulatory requirements for smaller establishments while providing greater operational flexibility to larger employers, without compromising essential worker protections.

For companies, employers, and compliance professionals in Gujarat, the ordinance, issued on December 16, 2025, has immediate and practical implications. It impacts workforce planning, shift scheduling, overtime administration, and workplace safety obligations, particularly for businesses with extended or round-the-clock operations. A clear understanding of the revised provisions will be critical to ensuring compliance and aligning internal policies with the state’s evolving labor landscape.

Key amendments introduced by the Gujarat Shops & Establishments ordinance, 2025

Revised applicability threshold

The ordinance increases the applicability threshold under the Gujarat Shops and Establishments Act from 10 to 20 employees. As a result, the Act now applies primarily to larger establishments with 20 employees or above, providing compliance relief to smaller businesses. Establishments falling below the revised threshold are exempt from the Act’s requirements, significantly reducing their regulatory and administrative burden.

Extended working hours and rest intervals

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To align the law with contemporary business practices, the ordinance expands permissible working hours. The maximum daily working limit has been increased from 9 to 10 hours, while the duration of continuous work before a mandatory rest interval has been extended from five to six hours. To prevent excessive fatigue, the ordinance retains a strict “spread-over” limit of 12 hours, ensuring that total time spent at the workplace, including rest breaks, does not exceed this cap.

Revised overtime framework

Recognizing the operational needs of businesses facing seasonal or project-driven workload fluctuations, the ordinance enhances flexibility for overtime deployment. The maximum permissible overtime has been increased from 125 hours to 144 hours per quarter, enabling employers to better manage peak operational demands while remaining within statutory limits.

Women’s employment during night hours

Under Gujarat S&E, it is now permitted for women to work night shifts between 9:00 p.m. and 6:00 a.m., subject to stringent safety and welfare conditions. Employers must obtain explicit written consent from the woman employee before assigning night shifts. The law mandates robust safety measures, including secure transportation from the workplace to the employee’s residence, dedicated facilities such as restrooms and ladies’ toilets, and night crèches where applicable.

Employers are also required to implement effective sexual harassment prevention mechanisms and maintain documented safety and security protocols.

Legislative background and context

The Gujarat Shops and Establishments Act, 2019, was enacted to simplify compliance and promote greater participation of women in the workforce. In the context of India’s switch to a unified labor code framework, states have increasingly undertaken targeted reforms to modernize their labor laws.

The amendments reflect Gujarat’s policy intent to ease compliance burdens for businesses while preserving essential safeguards for worker welfare.

Impact on companies operating in Gujarat

The practical implications of the Gujarat S&E ordinance, 2025, vary depending on the size, structure, and operational model of the business.

Small and mid-sized establishments

Establishments employing fewer than 20 workers are likely to benefit most from the revised framework, as they may now fall outside the Act’s applicability. Such businesses should reassess their coverage status under the amended law and, where applicable, update internal policies, registers, and compliance documentation to reflect the change.

Large employers and multi-location businesses

Larger organizations operating in the state will need to manage a more complex compliance transition. Internal policies and operational practices must be updated to accommodate the revised daily working hour limits and the enhanced quarterly overtime cap of 144 hours. In addition, businesses opting to deploy women employees in night shifts must account for the associated infrastructure and compliance requirements, including secure transportation, consent management, and enhanced workplace safety and welfare arrangements necessary for lawful night-shift operations.

HR and compliance functions

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HR and compliance teams play a critical role in implementing the amended provisions. Immediate priorities include revising employee handbooks and attendance or time-tracking systems, establishing clear and auditable processes to document voluntary consent for night-shift work, and training managers on the updated working hour and overtime thresholds to mitigate the risk of inadvertent non-compliance.

Minimum wages: No change under the ordinance

Employers should note that Ordinance No. 3 of 2025 does not amend or revise existing minimum wage rates in Gujarat. Minimum wages remain under the jurisdiction of India’s Code on Wages, 2019, and state-specific wage notifications. Consequently, organizations must continue to monitor periodic minimum wage revisions independently of these Shops and Establishments amendments to ensure they remain in full compliance with all statutory pay standards

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Compliance checklist for employers

To ensure compliance with the Gujarat S&E ordinance, 2025, employers should undertake a structured review of their workforce practices and internal controls. Key action points include the following:

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Assess applicability: Re-evaluate the total number of employees against the revised 20-worker threshold to determine whether the Act continues to apply. This assessment will clarify the organization’s ongoing compliance obligations under the amended framework.
Review and redesign work schedules: Update shift structures to align with the revised limits of 10 working hours per day and a maximum of six hours of continuous work before a rest interval. Proper scheduling will support operational efficiency while ensuring statutory compliance.
Review overtime and payroll systems: Incorporate the enhanced quarterly overtime limit of 144 hours into payroll and attendance systems. This will help prevent wage disputes, ensure accurate overtime payments, and maintain transparency in compensation practices.
Prepare for women’s night-shift employment: Where night shifts for women are planned, implement the mandated safety and welfare measures, including secure transportation, workplace facilities, and documented consent procedures. Compliance in this area supports workforce inclusivity while meeting statutory safety requirements.
Update internal policies and documentation: Revise HR manuals, employee handbooks, standard operating procedures, and internal communications to reflect the amended provisions. Clear and updated documentation reduces legal risk and ensures consistent implementation across the organization.

Conclusion

By raising applicability thresholds and expanding working-hour and overtime limits, the state reduces compliance pressure on smaller businesses while giving larger employers greater operational latitude. At the same time, the ordinance raises the bar on workforce governance, particularly around extended working hours and the safeguards required for women’s night-shift employment.

For companies operating in Gujarat, these changes demand timely action rather than passive observation. Employers should review workforce sizing, redesign shift and overtime structures, and strengthen internal policies on safety, consent, and workplace facilities.

Early alignment with the amended framework will help businesses manage regulatory risk, maintain workforce stability, and support sustainable growth as Gujarat continues to position itself as a competitive destination for investment and employment.

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