--- title: "Karnataka Shops and Commercial Establishments Amendment Act, 2026: Key Changes for Employers " date: 2026-09-23 author: "Ajay KSK" url: https://ksandk.com/newsletter/karnataka-shops-and-commercial-establishments-amendment-act-2026-key-changes-for-employers/ --- # Karnataka Shops and Commercial Establishments Amendment Act, 2026: Key Changes for Employers  Posted On - 23 September, 2026 • By - Ajay KSK The Karnataka Shops and Commercial Establishments (Amendment) Act, 2026 (“**Amendment Act**”), amending the Karnataka Shops and Commercial Establishments Act, 1961 (“**Parent Act**”), received the assent of the Governor on September 3, 2026, was published in the Official Gazette as Karnataka Act No. 38 of 2026 vide Notification No. DPAL 32 SHASANA 2026 dated September 4, 2026, and has come into force with immediate effect. The Amendment Act introduces significant changes to the registration framework, employer obligations, statutory cross references, and the penalty and appeal structure under the Parent Act and separately omits a set of specific safeguards that had applied to women employees on night duty.  On registration, the Amendment Act inserts a new exemption under which establishments employing 10 or more workers that are already registered under the OSHWC Code stand excluded from the applicability of the Parent Act and dispenses with the requirement of separate registration for godowns and storage facilities situated within one hundred metres of the principal establishment. Registration, its issuance and the payment of fees are moved to electronic mode, the timeline for an Inspector to communicate reasons for refusing an application is reduced from 30 days to 7 days, with deemed registration if no communication is received, and registration, once granted, no longer requires periodic renewal. The imprisonment previously prescribed for falsely claiming the benefit of deemed registration has been substituted with a monetary fine extending up to Rs. 50,000.  The Amendment Act introduces two new employer obligations: a service certificate must be issued to an employee within 7 days of an application in the prescribed form, and employers are barred from retaining an employee’s original educational or experience certificates, or any other original document, at appointment or during employment. Both obligations carry penal consequences. The Amendment Act also substitutes the reference to the Payment of Wages Act, 1936 with the Code on Wages, 2019, and the reference to the Workmen’s Compensation Act, 1923 with the Code on Social Security, 2020, for extending the timely payment and compensation frameworks under the codes to shop and establishment employees. It further introduces, for the first time, a structured compounding mechanism, under which the jurisdictional Labour Officer may compound an offence on payment of fifty per cent of the prescribed fine for a first offence and 75 per cent for a subsequent offence, subject to a bar on compounding an offence of the same nature more than twice in a year, together with a right of appeal against a compounding order within 30 days before an Assistant Labour Commissioner or above, subject to prior deposit of the fine.  Separately, the Amendment Act omits clauses 25(1)(h) to 25(1)(o) of the Parent Act, which had prescribed detailed transport safeguards for women employees on night duty, including mandatory verification and background screening of drivers, fixed and authorised pick-up and drop routes, a requirement against a woman employee being the first to be picked up or the last to be dropped, random checking of night-shift vehicles, and the maintenance of a control room to monitor vehicle movement in real time. The Karnataka State IT/ITeS Employees Union has publicly opposed the removal of these safeguards, pointing to the large proportion of women employed on night shifts in the State’s information technology and information technology enabled services sector, and has called for their restoration. The statutory framework governing prevention of sexual harassment at the workplace, including the constitution of an Internal Committee under the applicable law, and the more general safety obligations under the OSHWC Code and its Karnataka rules, are not affected by this omission.  Establishments operating in Karnataka should assess whether their existing OSHWC Code registration now takes them outside the applicability of the Parent Act and document the position taken for record purposes. Employers should audit personnel files and return any original certificates currently retained, put in place a seven day turnaround process for service certificate requests, and review night shift standard operating procedures for women employees in light of the omission of clauses 25(1)(h) to 25(1)(o), deciding whether to retain measures such as driver verification and defined pick-up and drop routes as a matter of internal policy even though they are no longer separately mandated. Given the public scrutiny attracted by this change and its immediate effect, this exercise should be undertaken on priority. *Last Updated on 21 September, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)