Karnataka unveils progressive amendments to Shops and Commercial Establishments Rules, 2025

Introduction:

In a decisive move towards simplifying labour compliance and promoting business-friendly reforms, the Government of Karnataka issued the Draft Karnataka Shops and Commercial Establishments (Amendment) Rules, 2025 on 11 September 2025. The proposed amendments seek to modernise the existing regulatory framework, providing much-needed operational flexibility for establishments while ensuring continued protection for workers.

Highlight:

A key highlight of the draft is the exemption granted to small establishments employing fewer than ten workers from the applicability of Rule 24 of the principal Rules. This exemption is expected to substantially ease the compliance burden on micro and small enterprises a sector often constrained by procedural and administrative complexities. By streamlining regulatory requirements for these smaller entities, the government aims to bolster entrepreneurship and employment generation in the state’s vibrant retail and service ecosystem.

While the draft primarily focuses on this exemption, it aligns with Karnataka’s broader endeavour to modernise labour laws and create an enabling environment for employers. Recent discussions within the state have also indicated potential reforms concerning working hour flexibilityand overtime ceilings, mirroring the trend seen in other progressive states seeking to align labour governance with the realities of a dynamic economy.

The Labour Department has invited public feedback and suggestions on the proposed amendments until 11 October 2025. Stakeholders including employers, employee representatives, and industry associations are encouraged to share their views with the Secretary, Labour Department, Government of Karnataka, Bengaluru, before the consultation window closes.

This initiative reinforces Karnataka’s commitment to fostering an “Ease of Doing Business” environment without compromising on worker welfare. For employers, the proposed changes represent an opportunity to operate with greater procedural clarity and reduced administrative strain. However, it also underscores the importance of proactive engagement with the evolving legal landscape to ensure timely compliance once the final notification is issued.

In essence, the draft amendment marks another step in Karnataka’s ongoing journey toward progressive labour governance one that balances the twin objectives of economic growth and equitable employment practices.