Uttar Pradesh Updates Shops & Establishments Law: Check Applicability, Working Hours, and Compliance

The Indian state of Uttar Pradesh has introduced sweeping changes to its Shops and Commercial Establishments Act, 1962, significantly expanding its coverage and modernizing compliance requirements. The amendments, brought into force through the Uttar Pradesh Shops and Commercial Establishments (Amendment) Act, 2025, took effect on November 19, 2025.

The reform aims to strengthen employee protections, formalize employment practices, and improve enforcement, while maintaining a calibrated compliance burden for businesses.

Statewide applicability with employee threshold

One of the top highlights under the revised law is the extension of the act across the entire state of Uttar Pradesh, including both urban and rural areas. Previously, the law applied largely to urban centers.

However, applicability is now linked to workforce size. The amended Act applies mandatorily only to establishments employing 20 or more workers. Smaller businesses to continue operations without mandatory compliance, unless they opt in voluntarily. This threshold-based approach seeks to protect employees in larger organizations while avoiding regulatory pressure on micro and small businesses.

New categories of establishments 

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The amendment substantially widens the scope of what constitutes a “commercial establishment.” In addition to shops and traditional commercial offices, the Act now expressly covers a wide range of professional and service-sector entities, including:

• Hospitals, clinics, polyclinics, dispensaries, maternity and delivery homes
• Offices of architects, tax consultants, and other technical or professional consultants
• Service providers, service platforms, and delivery-based businesses
• Banking, insurance, brokerage, and financial services offices
• Theatres, cinemas, and places of public entertainment
• Clerical establishments connected to factories where the Factories Act does not apply

As per the official announcement, the state government retains the power to notify additional categories in the future. As a result, many professional and service-oriented establishments that previously operated outside the Act’s framework now fall clearly within its ambit.

CLICK HERE: Shops and Establishment Acts in India: An Explainer

Digital and automatic registration

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Registration under the UP Shops and Commercial Establishments Act is now fully digitized. Employers are required to apply through the departmental web portal, and where applications are complete and eligibility conditions are met, registration is granted automatically. Registration certificates are issued electronically and sent to the employer’s registered email address.

The amendment also clarifies that:

1. Registrations obtained through misrepresentation or forged documents may be cancelled
2. The registration certificate does not constitute proof of ownership of the premises

Registration formats and fees will be prescribed and managed through the online system.

Revised working hours, overtime framework

The amendment updates working hour limits to provide greater operational flexibility while retaining safeguards on total hours worked.

Working hour limits

No employer shall require or allow an employee to work on any day for over: 

(a) six hours in the case of a young person; and
(b) nine hours in the case of any other employee:

Including overtime, total working hours must not exceed 11 hours in a single day, except on days involving stock-taking or account finalization.

Overtime rules

1. Overtime is capped at 144 hours per quarter
2. Employees must be paid twice the ordinary rate of wages for overtime work
3. Ordinary wages include basic pay and allowances but exclude bonuses

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Night-shift employment of women

The regulatory update revises the definition of night work for women. Women may now be employed between 7:00 pm and 6:00 am (IST), subject to compliance with prescribed safeguards.

Employers must ensure adequate:

• Safety and security arrangements
• Transportation from the workplace to the employee’s residence
• Restrooms, food or canteen facilities where applicable
• Night crèche facilities where required
• Separate and adequate ladies’ toilets
• Written consent from women employees

This change is intended to expand employment opportunities for women while reinforcing workplace safety obligations.

Appointment letters are mandatory for all employees

Employers in UP are now mandated to issue appointment letters that must include essential details such as employee identity, job role, skill classification, wages, and nature of employment.

Enhanced penalties for non-compliance

To strengthen enforcement, the state has substantially increased penalties for violations of labor provisions. Earlier fines ranged between INR 100 (US$1.1) and INR 500 (5.52). Under the revised regime:

• A first offence may attract a penalty of up to INR 2,000 (US$22.08)
• A second offence may attract a penalty of up to INR 10,000 (US$110.4)

The revised penalties are intended to improve compliance and deter unfair labor practices in larger establishments.

Opportunity to rectify non-compliance before prosecution

A key procedural safeguard has been introduced for employers. Before initiating prosecution for most offenses under the state act, inspectors must issue a 15-day written improvement notice, allowing the employer time to correct the violation.

If the employer complies within the stipulated period, prosecution will not be initiated. However, this relief does not apply if the same violation is repeated within five years, in which case enforcement action may proceed directly.

Inspection and grievance redressal framework

Labor inspections in the state will continue to be conducted by Labor Enforcement Officers (LEOs), primarily through the Central Inspection System (CIS). The system randomly selects establishments for inspection, reducing discretionary enforcement. Inspections may also be conducted independently where complaints are received.

Workers may raise grievances through multiple channels, including the following:

1. The Integrated Grievance Redressal System (IGRS)
2. Local labor offices
3. Labor courts
4. Labor Department helpline: (+91) 1800-180-5160

Why these amendments matter

The latest labor and commercial operation amendments reflect Uttar Pradesh’s broader policy direction toward expanded worker protection, formalization of employment, and stronger enforcement, while maintaining proportional compliance requirements for businesses.

For employers, the changes mean:

• Broader applicability across sectors
• Increased documentation and workplace obligations
• Higher penalties for non-compliance
• Clearer rules governing working hours and night shifts

Businesses operating in Uttar Pradesh should review their workforce size, registration status, employment documentation, and workplace policies to ensure alignment with the updated law.

(US$1 = INR 90.54)

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