Punjab Shops and Commercial Establishments (Amendment) Act, 2025: Modernizing labour regulations

Introduction

In September 2025, the Punjab government introduced the Punjab Shops and Commercial Establishments (Amendment) Act, 2025, bringing significant reforms to modernize labour regulations in the state. One of the key changes under this amendment is the shift from compliance based on geographical zones to workforce size. This simplification allows smaller establishments employing fewer than 20 workers to operate with reduced statutory obligations, requiring only basic information submission to the labour department within six months of commencing business. For businesses with more than 20 employees, full compliance with the Act is mandated, ensuring that the reforms maintain appropriate safeguards while reducing administrative burdens for smaller enterprises.

Simplified Registration and Operational Efficiency

The amendment also streamlines the registration process for establishments employing 20 or more workers. Employers now have six months to obtain registration, and applications are deemed approved within 24 hours unless a reasoned objection is issued by authorities. This change significantly enhances operational efficiency and reduces delays in starting or expanding business activities. In addition, the amendment introduces flexibility in working hours, increasing permissible daily working hours from nine to ten and extending the maximum spread-over period to twelve hours. The quarterly overtime limit has also been raised, providing employers with the flexibility to manage workforce productivity effectively. However, any work beyond the standard hours must be compensated appropriately to remain compliant with labour laws.

The Act further strengthens protections for young workers, introducing stricter penalties for violations. Employers found contravening provisions related to the employment of young persons may face fines ranging from ₹1,000 to ₹25,000 for a first offense, and up to ₹50,000 for subsequent offenses. This ensures that while businesses gain operational flexibility, the rights and well-being of young workers remain safeguarded. Additionally, the amendment allows for the compounding of minor offenses, such as record-keeping or inspection violations, enabling employers to resolve infractions without prolonged legal proceedings and fostering smoother operations.

Implications and Opportunities for Employers

From an employer’s perspective, the 2025 amendments present an opportunity to optimize operations while ensuring compliance with updated labour norms. The simplification of rules for smaller establishments can reduce compliance costs, and the extended working hour flexibility allows businesses to align labour deployment with production and market demands. By proactively adapting policies and workforce management practices to these changes, employers can mitigate legal risks, enhance productivity, and create a more efficient and harmonious work environment.

Conclusion: Toward a Modern, Balanced Labour Framework

Overall, the Punjab Shops and Commercial Establishments (Amendment) Act, 2025, represents a significant step toward modernizing labour regulations, offering businesses both operational advantages and a framework for responsible workforce management.