'Overtime work, registration waiver': Know what's new in Punjab Shops and Commercial Establishments Act

In what is called a decision to benefit the small business community, the Punjab government on Wednesday amended the Punjab Shop and Commercial Act 1958. Punjab Chief Minister Bhagwant Singh Mann informed the media about the latest labour law reforms after the cabinet meeting. CM Mann said that this amendment will free shopkeepers from the inspector raj. Now, shopkeepers will not have to give any account for keeping up to 20 helpers or employees. The new Punjab Shop and Commercial Act 1958 is aimed at reducing compliance burdens on 95 percent of small businesses and enhancing ease of doing business in the state.

Now, the question arises, what are the amendments that the Mann Government has introduced, and how will they benefit small businesses? Below is all you need to know- 

What's new in the Punjab Shop and Commercial Act?

The reform is designed to reduce red tape, decriminalise minor violations, and enhance the ease of doing business, especially for small establishments employing up to 20 workers. This transformative decision is expected to benefit over 95% of Punjab’s businesses, particularly small shopkeepers, traders, service outlets, and micro-enterprises that form the backbone of the state’s economy.

Until the latest amendments were introduced, even small businesses with just a handful of employees were forced to comply with all provisions of the Act, which included:

• Tedious paperwork and registrations

• Labour inspections and compliance audits

• Threat of penalties for minor lapses

• Mandatory court appearances for minor offences

Full Exemption for Small Businesses (Up to 20 Employees).  All commercial establishments employing up to 20 workers are now exempt from all provisions of the Act. They only need to submit basic information to the Labour Department within 6 months.

 

• Daily spread-over extended from 10 hours to 12 hours (including rest intervals)
• Quarterly overtime cap increased from 50 hours to 144 hours
• Employees working beyond 9 hours/day or 48 hours/week must be paid double wages

Under the new system, businesses applying for registration will receive approval within 24 hours. If no response is received within that timeframe, the registration will be considered automatically approved. Inspectors will be allowed to visit premises only once every three months for checks.

Units with fewer than 20 workers are not required to register, reducing bureaucratic barriers.

• Minimum fine raised from Rs 25 to Rs 1,000
• Maximum fine increased from Rs 100 to Rs 30,000
• A 3-month grace period provided between first and repeat offences

• Minor violations can now be compounded (settled by paying a fine)
• No need to go to court for small infractions
• Helps prevent harassment and saves time for business owners

The Punjab Government has clarified that all existing labour protections remain in place. Workers will continue to enjoy:

• Proper wages
• Rest intervals and working hour limits
• Safety rights
• Legal safeguards under broader labour laws

• If you employ up to 20 workers: No registration needed, just submit basic information to the Labour Department within 6 months.
• If you have more than 20 workers- apply for registration, and it will be deemed approved within 24 hours.
• Maintain overtime records and ensure double pay for extra hours worked.

Jalandhar Central Halka Incharge Nitin Kohli lauded the Bhagwant Mann Government for abolishing Inspector Raj in Punjab. Nitin Kohli said, "The Punjab Government has made a major decision that has brought huge relief to small businesses. There is a wave of happiness among the small business community. The Mann Government has officially ended Inspector Raj. I’m thankful to our supremo, Shri Arvind Kejriwal ji, and Punjab CM Shri Bhagwant Singh Mann ji for this bold move."

"This has been a long-standing demand of our small traders. Previously, inspectors would harass business owners daily, asking for different documents. Now, inspectors can visit only once every six months — either at the trader’s office or the trader may visit the inspector's office if required. The overtime limit has also been raised from 50 to 144 hours, and bigger businesses too have also been given additional facilities. For companies with more than 20 employees, the registration application will be approved within 24 hours, and if not, it will be considered approved automatically.

Earlier, fines ranged from ₹25 to ₹100. Now, the first-time penalty will range from ₹1000 to ₹3000, and a three-month grace period will be provided for making corrections. Legal matters will also be resolved directly — there's no need to go to court anymore."