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Shops and Establishments Act in Chhattisgarh: Rules & Compliance 2025-26

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The Shops and Establishments Act in Chhattisgarh was renamed and updated as the Chhattisgarh Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017, which came into force on 13 February 2025. It replaced the 1958 Act. A subsequent amendment (passed in 2025 and gazetted in July 2026) increases the coverage threshold to establishments with 20 or more workers and extends the working day to 10 hours.

What is the Shops and Establishments Act in Chhattisgarh?

The Chhattisgarh Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 regulates the employment and service conditions of workers in covered shops and establishments in the state. It governs matters such as registration, working hours, rest intervals, overtime, leave, holidays, welfare measures, and employment records.

• Applicability: Applies to commercial establishments meeting the statutory employee threshold, subject to specific state exemptions.
• Covered establishments: It includes shops and various non-factory establishments engaged in trade, business, professional services, banking, insurance, and other specified activities.
• Employment Standards: Regulates working hours, rest breaks, overtime compensation, leave accrual, festival holidays, and women’s employment conditions.
• Compliance: Covered employers must comply with applicable registration, record-keeping, and other statutory requirements.

What Changed in 2025-26: A Timeline

Chhattisgarh’s shops and establishments framework transitioned from the 1958 Act to the 2017 Act during 2025, followed by further amendments and alignment with the central Labour Codes.

Note: Employers should verify specific operational parameters, such as revised employee thresholds, working-hour caps, and overtime rules, against the official government gazette before implementation.

Who Must Register under the Act?

Registration in Chhattisgarh depends on the establishment’s workforce and the applicable labour framework. Employers should assess each location separately before filing.

Registration Requirement

An employer must register with the Labour Department within six months of commencing business and obtain a Labour Identification Number (LIN). Keep the registration certificate and LIN with the establishment’s records and quote the LIN in applicable returns.

Coverage Threshold

The 2017 Act applied to establishments with 10 or more workers. The 2026 amendment raises this threshold to 20 or more workers, thereby excluding smaller establishments from coverage under the state Act.

Interaction with the OSH Code

The OSH Code has a separate threshold of 10 workers. An establishment with 10 to 19 workers may therefore fall outside the scope of the state Act while remaining subject to the OSH Code. The PIB explanatory document on the OSH Code sets out its coverage; refer to statutory guidance on the OSH Code for detailed central requirements.

Separate Establishments

Each shop or branch is treated as a separate establishment. A business operating outlets in Raipur, Bhilai, and Bilaspur should therefore assess each location separately and maintain corresponding records. Employers operating multiple branches should manage compliance independently at each location and maintain accurate onboarding employment forms to establish verifiable headcount figures.

Hours, Spread-Over and Overtime

The 2017 Act prescribes daily and weekly working limits, whereas the subsequent amendment increases the daily working limit and maximum spread-over duration.

Employees must receive a 30-minute rest interval after every five hours of work and a paid weekly holiday of 24 consecutive hours. Overtime is payable at twice the ordinary rate of wages.

Reports differ on the revised overtime limit. The final gazette should be checked to confirm the applicable figure and reference period.

Spread-over covers the period from the start to the end of the working day, including breaks. For example, a 10-hour working day with a two-hour break uses a 12-hour spread-over. Maintain daily attendance records and correct missed entries promptly through attendance regularization to ensure accurate overtime calculations.

A Worked Example: A Raipur Showroom

Consider a Raipur showroom with 22 workers. It falls within the state Act’s reported 20-worker threshold and also meets the 10-worker threshold under the OSH Code.

For example, a full-time employee works 10 hours per day over four days a week (40 regular hours), along with 2 additional hours of overtime on one of those days. The showroom pays overtime at twice the ordinary rate and records it against the quarterly limit. It also ensures that the weekly hours, paid weekly holiday, and 12-hour spread-over remain within the applicable limits.

Maintaining detailed daily attendance records ensures full audit readiness during statutory inspections.

Leave and Festival Holidays

The 2017 Act provides the following leave and holiday entitlements:

• Casual Leave: 8 days per calendar year, credited on a quarterly basis.
• Earned Leave: 1 day for every 20 days worked, allowable up to a cumulative maximum of 45 days.
• Festival Holidays: 8 paid statutory holidays per year. This includes 3 national holidays (Republic Day, Independence Day, and Gandhi Jayanti) and 5 local festival holidays, as mutually agreed.

Employers should incorporate these statutory entitlements into their formal HR leave policy and align Chhattisgarh holiday schedules with official government notifications.

Women’s Night Work under the Rules

The Act permits women to work between 9:00 PM and 6:00 AM, subject to state-prescribed conditions. The 25 September 2025 amendment to the Rules removed the requirement for prior Labour Department permission and introduced specific safeguards. Employers must:

• Obtain written consent: Secure Form 6 from each female employee prior to assigning night-shift duties.
• Maintain minimum strength: Ensure that at least three women workers are employed in the night shift.
• Provide secure transport: Arrange safe pick-up and drop-off services with security guards, and maintain verification records for vehicles, drivers, and security personnel.
• Maintain a complaint mechanism: Provide a complaint box for women workers.
• Display emergency contacts: the local police station, police control room, and women’s helpline.
• Follow statutory requirements: Constitute the required internal committee and comply with applicable maternity benefit and workplace sexual-harassment laws.
• Submit the required information, including details of the arrangements in Form 7, to the Labour Department before employment begins.

Crèche and Welfare Duties

An establishment must provide a crèche facility when employing 30 or more women workers or 50 or more total employees. Neighboring establishments within a 1-km radius may operate a shared crèche. Employers should regularly monitor workforce counts, as exceeding either threshold immediately triggers statutory crèche obligations.

Records and Inspections

Employers should:

• Maintain records: Keep registers for attendance, overtime, leave, and wage payments for each establishment.
• Retain key documents: Preserve the Labour Identification Number (LIN) certificate, Form 6 consent forms, and Form 7 notices alongside establishment records.
• Maintain records electronically or in hard copy: Ensure hard copies can be promptly generated upon an inspector’s request.
• File annual returns: Submit them in the prescribed electronic or other approved form.
• Ensure completeness: Missing records or failure to produce them may constitute a contravention and attract separate penalties.

Penalties and Compounding

The Act prescribes substantial penalties for non-compliance, with certain offenses eligible for compounding at the prescribed amount.

The OSH Code prescribes distinct penalties for covered establishments. Employers should consult the specific provisions of the Code and Rules rather than relying on general penalty summaries.

Compliance Checklist for Employers in Chhattisgarh

• Determine the applicable threshold: Assess each establishment against the reported 20-worker threshold under the amended Act and the 10-worker threshold under the OSH Code.
• Complete registration: Register within six months of commencing business and retain the Labour Identification Number (LIN).
• Maintain statutory records: Keep worker, attendance, working-hour, wage, and leave records in an electronic or approved format that can be produced when required.
• Comply with working-hour limits: Ensure that daily, weekly, and spread-over limits are observed.
• Pay and record overtime: Pay overtime at twice the ordinary rate and monitor the applicable quarterly limit.
• Administer leave correctly: Apply the prescribed entitlements for casual leave, earned leave, and festival holidays.
• Document women’s night work: Maintain Form 6 consents, Form 7 submissions, transport records, and required committee documentation.
• Monitor crèche requirements: Review workforce numbers regularly to determine whether the prescribed crèche obligation applies.
• Review other statutory obligations: Verify contribution and filing requirements under the Chhattisgarh Labour Welfare Fund Act.

Conclusion

Chhattisgarh’s Shops and Establishments framework regulates working conditions and aligns with evolving state and central labour legislation. Employers should assess their establishment against the applicable coverage and compliance requirements rather than relying on older thresholds or provisions.

As labour regulation becomes increasingly integrated with digital registration and broader central labour standards, employers should maintain structured compliance processes that accommodate future statutory changes with minimal disruption.

factoHR’s integrated attendance, leave, and payroll software simplifies compliance management for employers in Chhattisgarh by centralizing employee records, hours, and overtime tracking. Schedule a demo to learn more.

Frequently Asked Questions

What is the Minimum Wage in Chhattisgarh?

Minimum wages in Chhattisgarh are notified separately by the state government and vary by employment category. Employers should verify the latest applicable rates before processing payroll.

Does Professional Tax Apply in Chhattisgarh?

Yes, Professional Tax is a distinct state levy and must be evaluated independently of Shops and Establishments compliance. Employers should verify the applicable slab and filing requirements.

Is the Labour Welfare Fund Applicable in Chhattisgarh?

Yes. Labour Welfare Fund obligations are governed separately and may apply depending on the establishment and employees covered.

Do PF and ESI Apply to Shops and Establishments in Chhattisgarh?

PF and ESI are governed by separate central legislation. Their applicability depends on the establishment’s coverage and prescribed thresholds and should be assessed separately.

Is a Trade License Required for a Shop in Chhattisgarh?

A trade license and Shops and Establishments registration serve different purposes. Whether a separate municipal or local license is required depends on the nature and location of the business.

Does the Act Apply to Private Offices and Service Businesses?

Yes, provided statutory employee thresholds are met. PF and ESI are governed by central legislation and must be evaluated based on total headcount and salary thresholds. The framework extends beyond conventional retail shops to specified commercial and professional establishments.

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