Punjab recently approved major reforms to its Shops & Commercial Establishments Act, 1958, designed to reduce compliance burdens on small businesses, while strengthening regulatory clarity and worker protections. The changes were enacted by the Punjab Shops & Commercial Establishments (Amendment) Act, 2025, gazetted on August 29, 2025. Below is a condensed overview of what has changed, followed by a table comparing old vs new provisions.
Comparative Table: Pre 2025 vs Post Amendment
| Feature | Old Act (Pre Amendment) | New / Amended Act (2025) |
|---|---|---|
| Applicability / Threshold | All shops/commercial establishments regardless of number of workers had to follow full Act. | Full provisions apply only to establishments with 20 or more workers. Those with less than 20 shall provide only basic intimation of business details. |
| Registration Requirement | All businesses required full registration and record keeping from the start. | Less than 20 workers: just intimation. 20+ workers: registration required, with simplified/deemed approval if inspector delays. |
| Deemed Registration | No clear provision of “deemed grant” if registration delayed. | For 20+ worker establishments, application must be processed within 24 hours; else registration is deemed granted. |
| Working Hours (Daily Max & Spread Over) | Daily limit : 9 hours; spread over : 10 hours (including breaks/rest). | Daily working hours now up to 10 hours; daily spread over (including rest) extended to 12 hours. |
| Overtime Limits | Overtime up to 50 hours per period (quarter or other) | Overtime limit raised to 144 hours per corresponding period. Double pay required beyond certain thresholds. |
| Penalties (Minimum / Maximum) | Fines were much lower: e.g. for various offences, minimum fines were very small (₹25 or so in some cases), maximums modest. Enforcement penalties were less severe, and continuation or repeat offences less specifically delineated. | Minimum fines raised to around ₹1,000 in many sections; maximum fines also significantly higher (up to ₹30,000+ in some cases). Daily fines introduced for continued offences. |
| Grace Periods & Repeat Offences | Less formal structure, limited grace between offences. | Specified grace period between first and second offences and subsequent ones; more structured for repeats. |
| Compounding / Settlement | No clear mechanism to compound offences; mostly court or inspector led prosecution. | Section 26-A allows offences to be compounded; composition fee up to the max fine; no further proceedings once compounded. |
| Schedule of the Act | Included Schedule with additional ancillary provisions. | Schedule has been omitted; those extra provisions removed. |
What Businesses Should Do?
- If you run an establishment with fewer than 20 employees: ensure you submit the required basic information/intimation to the labour department within six months. You are exempt from many detailed obligations until/unless your workforce grows to 20.
- If you have 20 or more workers: check that registration is done properly (or deemed), maintain due records, watch working hours and overtime, and keep up with any changes (workforce, ownership, etc.) so as to avoid steep fines.
- All establishments should review compliance processes in light of the new penalties and the possibility of compounding, to reduce risks of enforcement.
Conclusion
The 2025 amendments to the Punjab Shops & Commercial Establishments law mark a significant shift toward easing regulatory burdens, particularly for small enterprises, while maintaining protections for workers and stronger enforcement powers for the state. The key trade off is that larger businesses must adapt to stricter compliance and oversight. For many businesses, the risk of non compliance has increased; at the same time, the reforms bring clearer rules, faster registration, and opportunities to settle minor offences without full legal proceedings.
Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.
