Understanding the Gujarat Shops and Establishments (Amendment) Act, 2026

Posted by Written by Yanyan Shang and Archana Rao Reading Time: 4 minutes

Gujarat has enacted the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) (Amendment) Act, 2026, marking a major update to its Shops and Establishments framework. The amendment reflects the state’s objective to align labor regulations with evolving business requirements while maintaining employee safeguards.

The state government has amended the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019, introducing changes to applicability thresholds, working and overtime hours, and conditions governing women’s employment, including night shifts subject to prescribed safeguards.

The amendment was initially introduced through Ordinance No. 3 of 2025, issued on December 16, 2025. It has since been passed by the state legislature, received the governor’s assent, and was formally notified on February 27, 2026.

The revised framework reflects a calibrated policy approach. It reduces compliance burdens for smaller establishments while granting greater operational flexibility to larger employers, without diluting core worker protections.

For companies, employers, and compliance professionals in Gujarat, these amendments have immediate and practical implications. They impact workforce planning, shift scheduling, overtime administration, and workplace safety obligations, particularly for businesses operating extended or round-the-clock shifts. A clear understanding of the revised provisions is critical to ensuring compliance and aligning internal policies with the evolving labor regulatory landscape.

Key amendments under the Gujarat S&E Amendment Act, 2026

Revised applicability and intimation thresholds

The amendment increases the applicability threshold under the state S&E Act from 10 to 20 employees. As a result, establishments employing 20 or more employees fall within the full scope of the law.

At the same time, the threshold for intimation requirements has also been revised. Establishments employing fewer than 20 employees are now required to furnish prescribed details to the Inspector, increasing the reporting base compared to the earlier 10-employee threshold.

This dual change reduces regulatory intensity for smaller establishments while retaining a level of administrative oversight.

Extended working hours and rest intervals

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To align with modern business practices, the amendment expands permissible working hours:

  • Daily working hours increased from 9 to 10 hours
  • Continuous work limit increased from 5 to 6 hours before a mandatory rest interval
  • Spread-over limit remains capped at 12 hours

However, the weekly working hour cap remains unchanged at 48 hours.

This creates an important compliance consideration: a 10-hour workday over five days results in 50 hours per week, exceeding the statutory weekly limit and potentially triggering overtime obligations.

Revised overtime framework

The amendment enhances flexibility in overtime deployment:

  • Quarterly overtime limit increased from 125 hours to 144 hours
  • Daily working ceiling aligned with 10-hour limit

This enables businesses to better manage peak workloads while remaining within statutory limits.

Women’s employment during night hours

Women employees are now permitted to work night shifts between 9:00 p.m. and 6:00 a.m., subject to stringent safeguards.

Key employer obligations include:

  • Obtaining explicit and documented consent from the employee
  • Providing secure transportation between workplace and residence
  • Ensuring adequate workplace facilities, including restrooms and welfare amenities
  • Implementing robust mechanisms under applicable sexual harassment laws
  • Maintaining auditable safety and security protocols

These provisions aim to promote workforce participation while reinforcing employer accountability.

Legislative context and regulatory overlap

The original Gujarat Shops and Establishments Act, 2019, was designed to simplify compliance and encourage workforce participation, particularly for women. The 2026 amendment builds on this objective by introducing threshold-based compliance rationalization and operational flexibility.

However, employers must also consider the interaction with the central Occupational Safety, Health, and Working Conditions Code, 2020, which prescribes 8 hours as the standard daily working period for establishments meeting specified thresholds.

This creates a potential regulatory overlap, requiring employers, especially multi-state operators, to carefully align internal policies with both state-specific flexibility and central labor code requirements.

Impact on companies operating in Gujarat

Small and mid-sized establishments

Establishments employing fewer than 20 workers benefit from reduced regulatory burden in terms of full applicability. However, they must continue to comply with intimation requirements and reassess their compliance posture accordingly.

Large employers and multi-location businesses

Organizations employing 20 or more workers must update internal policies and operational practices to reflect:

  • Revised daily working hour limits
  • Enhanced quarterly overtime caps
  • Compliance requirements for women’s night-shift employment

Additional investments in infrastructure, safety systems, and documentation processes may be required to ensure lawful operations.

HR and compliance functions

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HR and compliance teams play a central role in implementation. Key priorities include:

  • Updating employee handbooks and HR policies
  • Aligning attendance and payroll systems with revised thresholds
  • Establishing auditable consent frameworks for night-shift work
  • Training managers on revised working hour and overtime limits
  • Assessing alignment with central labor codes

Minimum wages: No change

The amendment does not alter minimum wage provisions. Wage regulation continues under the Code on Wages, 2019, and applicable state notifications. Employers must continue to monitor periodic revisions independently.

CLICK HERE: A Guide to Minimum Wage in India

Compliance checklist for employers

To ensure compliance, employers should:

  1. Assess applicability: Re-evaluate workforce size against the revised 20-employee threshold
  2. Review work schedules: Align with 10-hour daily and 6-hour continuous work limits
  3. Monitor weekly hours: Avoid breaching the 48-hour cap to manage overtime exposure
  4. Update overtime systems: Incorporate the revised 144-hour quarterly limit
  5. Enable safe night shifts for women: Implement transport, infrastructure, and consent mechanisms
  6. Revise policies and documentation: Update SOPs, contracts, and compliance registers
  7. Evaluate cross-law alignment: Ensure consistency with central labor codes

Conclusion

By raising applicability thresholds and expanding working-hour and overtime limits, the amendment reduces compliance pressure on smaller businesses while granting greater operational flexibility to larger employers. At the same time, it strengthens governance requirements, particularly in relation to extended working hours and women’s night-shift employment.

For companies operating in Gujarat, these changes require proactive alignment. Employers should revisit workforce structures, recalibrate shift models, and strengthen compliance frameworks to address both state-level amendments and central labor law considerations.

Early adaptation will be critical to managing regulatory risk, ensuring workforce well-being, and supporting sustainable business operations as Gujarat continues to position itself as a competitive investment destination.

For more information and advice for foreign investors on doing business in India, please feel free to email us at india@dezshira.com.

(This article was originally published on January 14, 2026. It was updated on March 18, 2026.)

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