Maharashtra Shops and Establishment Act, 2017
Note: We explain the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Rules, 2018 here.
The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 came into effect December 20, 2017. The 2017 Act replaces the Maharashtra Shops and Establishment Act of 1948.
Previously, the federal government enacted the Model Shops and Establishments Act in 2016 that revised the regulatory norms for operating commercial establishments in India. Following this, several states initiated legislation to implement the new rules in their respective state jurisdictions.
Maharashtra is the first state in India to draft the new Shops and Establishments law. The law is applicable to all commercial establishments in the state, (not covered under the Factories Act), which employ 10 or more workers.
Firms that employ more than 10 workers must obtain a license under the Maharashtra Shops and Establishments Act within 60 days after the new Act comes into effect (December 20) or once a firm’s current license expires. The registration can be done online, and all records will be maintained electronically. Further, the commercial entity can determine the validity period of its registration, which cannot exceed 10 years. Firms which employ less than 10 works must still register under the Act but do not require a license.
Key changes to the 1948 Maharashtra Shops and Establishment Act
The Act introduces significant reforms for the employment conditions for workers in the following areas:
Hours of operation – Certain businesses in Maharashtra may now stay open 24/7. This includes movie theaters, restaurants, financial institutions, medical practices, and retail outlets. The Act excludes any establishment which sells alcohol or cigarettes from remaining open passed existing deadlines.
Working hours for women – The Act allows female workers the ability to work work passed 9:30pm so long as their employer provides safe transportation from the work site to their residence.
Protection of women – The Act prohibits the discrimination of women workers in matters of recruitment, training, promotion, and wages. Generally, women workers will be required to work only between 7 a.m. and 9:30 p.m. In emergencies, women may choose to work beyond these hours, provided the work space is safe and transport is made available for her to commute back to her residence.
Over time – The working hours for employees will not exceed nine hours per day and 48 hours per week. Otherwise, the employer must pay employees double their regular wages as over time.
Holidays and leave – The Act specifies that workers are eligible to eight casual leaves (CLs), and can accumulate 45 days of paid leave during a year. The establishment will declare eight days as paid festival holidays, including four national holidays. The other four festival holidays may be mutually agreed between the establishment and its workers.
Welfare of workers – The law makes it mandatory for the establishment to ensure adequate arrangements are made for the health and safety of workers. Cleanliness, hygiene, ventilation, and lighting also come under the definition of safety of workers.
Specifically, the law mentions the following safety measures:
- Provision of first-aid facilities in the place of work;
- Provision and maintenance of sufficient and clean drinking water at suitable points, conveniently situated for all persons employed in the establishment;
- Provision of washroom facilities for men and women;
- Establishments employing 50 or more workers must provide crèche facility for the use of children of such workers; and
- Establishments employing 100 or more workers must provide and maintain a canteen for the use of its workers.
Compliance and flexibility under the 2017 Maharashtra Shops and Establishments Act
The Act appoints facilitators to enforce its provisions. Facilitators will inspect the premises of registered establishments, review documents, and advice establishments towards complying with the norms. Any establishment that deviates from the standards and norms specified under the Shops and Establishment Act will be liable to a fine of US$1,535 (Rs 100,000).
However, it is useful to note that by not regulating the working conditions in firms engaging less than 10 workers, the Act provides significant compliance relief for micro, small, and medium sized firms (MSMEs).
Finally, responding to concerns raised by business associations, the Maharashtra state government has proposed different working hours for different categories of establishments. Malls, restaurants, movie theatres, and other recreational centers are likely to benefit the most from this move.