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Bihar Shops and Establishments Act: Registration & Compliance

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The Shops and Establishments framework in Bihar underwent two major statutory changes within a single year. The state passed a new Act in August 2025 and repealed it via ordinance on June 1, 2026. The Occupational Safety, Health and Working Conditions (OSH) Code, in force since 21 November 2025, now governs most establishments and requires employers to align their registration, working hours, and leave policies with its framework.

What is the Shops and Establishments Act in Bihar?

The Bihar Shops and Establishments Act, 1953 is a state labour law that regulates working conditions and employment in shops and other covered establishments in Bihar. It regulates key working conditions, including work hours, holidays, leave, and general workplace requirements.

It generally applies to:

• Shops carrying on trade or business;
• Commercial and other covered establishments employing workers;
• Employees and other persons engaged in such establishments, subject to the Act’s definitions and exemptions; and
• Establishments operating within Bihar’s territorial jurisdiction.

Employers must cross-reference applicability against the central Labour Codes and updated Bihar notifications, given the subsequent repeal of the 2025 state legislation.

What Changed in 2025-26: A Timeline

Bihar’s shops and establishments framework underwent significant changes during 2025-26, moving from the long-standing state legislation to a new state Act and subsequently to the central Occupational Safety, Health and Working Conditions Code.

The state repealed the Act to eliminate regulatory overlap with the central OSH Code and prevent duplicate compliance burdens.

Which Law Applies to a Bihar Employer Today?

The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code), together with the rules framed by Bihar, currently provides the primary framework for working conditions in covered shops and commercial establishments.

• Establishments with 10 or more workers are subject to the OSH Code’s registration framework.
• Establishments with fewer than 10 workers: The current registration status remains unclear, as available sources do not conclusively confirm whether the earlier state framework still applies to them.
• Bihar Shops and Establishments Act, 1953: While the now-repealed Act was intended to replace the 1953 framework, the timing of the transition leaves the formal applicability of the 1953 Act for smaller establishments uncertain.

Pending formal clarification from the Labour Department, employers should align their operations with the OSH Code and applicable Bihar rules while preserving existing registrations.

What the Repealed 2025 Act Provided

Although the Act was never fully operationalized, it reflects the regulatory framework the state intended to establish. Several employers prepared for its implementation, and some of its provisions are reflected in the state’s OSH rules.

• Coverage and registration: It covered establishments with 10 or more workers. Registration was mandatory within six months of the commencement of business, and authorities were required to issue a Labour Identification Number (LIN) within seven days.
• Hours: The Act outlined three flexible shift options: 9 hours per day with 48 hours per week, 10 hours per day over a five-day week, or 11.5 hours per day over a four-day week. Employees could not work more than 5 consecutive hours without a break of at least 30 minutes, and a shift including rest could not exceed 12 hours.
• Overtime: Work exceeding the prescribed daily or weekly limits was payable at twice the ordinary rate of wages.
• Leave: It provided 7 days of sick leave and 8 days of casual leave per year. Earned leave accrued at one day for every 20 days worked, subject to a maximum accumulation of 45 days.
• Women and night work: Women could work between 6 a.m. and 9 p.m.; work beyond these hours required prior authorization and mandatory facilities, including restrooms, night crèches, and secure transportation.
• Welfare: It required a crèche in larger establishments.
• Penalties: Fines ranged from ₹10,000 to ₹25,000 for a first contravention and ₹20,000 to ₹50,000 for a repeat offense. A contravention resulting in an accident could attract up to six months’ imprisonment, a fine of ₹2 lakh to ₹5 lakh, or both.

Registration and Records under the OSH Code in Bihar

Bihar’s current registration regime is governed by the Occupational Safety, Health and Working Conditions Code, 2020, alongside state-specific rules. Key obligations include:

• Electronic application: Submit the registration application through the designated state portal.
• Deemed approval: An application may be treated as approved if the authority does not process it within seven days, subject to the applicable rules.
• Appointment letters: Issue an appointment letter to every employee specifying the designation, wages, and employment category.
• Identity cards: Issue an identity card to every worker, except daily-rated workers where exempted under the applicable rules.
• Records: Maintain prescribed registers, wage records, attendance records, and muster rolls and keep them available for inspection.
• Health check-ups: Applicable establishments with 10 or more workers may also be required to provide annual health check-ups under the Bihar rules.

Establishments holding active registrations under either the 1953 or 2025 Acts should consult the Labour Department regarding transition protocols and retain all historical records.

Hours, Overtime and Leave under the OSH Code

Under the Occupational Safety, Health and Working Conditions Code, 2020:

• Working hours policy: Employees generally may not be required to work more than 8 hours per day or 48 hours per week. Alternative working patterns may be permitted within the prescribed weekly limit.
• Overtime: Overtime must be paid at twice the normal rate of wages. The applicable state rules prescribe the maximum overtime limit; Bihar’s rules reportedly set it at 144 hours per quarter.
• Paid leave: Employees become eligible for earned leave after completing 180 days of work in a calendar year, subject to applicable provisions.

Implementing a standardized leave management system helps ensure consistent application of statutory eligibility rules across the workforce.

Women and Night Work

Women may work night shifts subject to their explicit written consent and the employer’s provision of safety, transport, and facility measures as required by law. Employers should obtain the required consent in writing and maintain records of the prescribed arrangements.

Case Study: A 25-Person Office in Patna

Consider a services office in Patna employing 25 workers. As an establishment with 10 or more workers, it falls within the applicable OSH Code framework and is subject to the prescribed registration requirements.

If an employee earning ₹100 per hour works two hours of overtime, the overtime rate at twice the normal wage is ₹200 per hour. The employee would therefore receive ₹400 for the two additional hours. The employer should record overtime separately to monitor the applicable quarterly limit.

For instance, a new hire at this establishment becomes eligible for earned leave upon completing 180 qualifying working days within the calendar year, calculated from their date of joining.

Penalties and Inspections

The Occupational Safety, Health and Working Conditions Code, 2020 follows an Inspector-cum-Facilitator model. Inspectors may provide compliance guidance and conduct inspections. The Labour Resources and Migrant Workers’ Welfare Department has stated that inspection teams will be deployed to factories, establishments, and shops.

The Code prescribes penalties for contraventions, replacing the penalty provisions previously set out in prior state legislation. Employers should refer to the applicable provisions of the Code and Bihar rules before relying on penalty summaries.

Proceedings initiated under the repealed Act continue as if the repeal had not occurred. Employers that received a notice under that Act should continue to respond to it.

Common Compliance Gaps to Avoid

Employers operating during a period of legal transition should avoid the following compliance gaps:

• Waiting for complete clarity: Unresolved questions regarding the 1953 Act do not suspend obligations under the OSH Code. Comply with the requirements that are currently established.
• Relying on repealed provisions: The leave entitlements and penalty amounts under the Act are no longer applicable. Do not incorporate them into current policies.
• Inadequate documentation: Failing to issue appointment letters, maintain identity cards, or track attendance records can create major liabilities during official audits.
• Failing to record overtime: Record overtime separately so that hours and payments can be verified against applicable limits.
• Ignoring branch establishments: Assess each establishment separately against the applicable worker threshold.

Compliance Checklist for Employers in Bihar

1. Count your workers: Determine whether the establishment has 10 or more workers and is therefore subject to the OSH Code’s registration framework.
2. Register electronically: Submit the required registration through the designated state portal and retain the acknowledgment.
3. Issue appointment letters: Provide each employee with an appointment letter that specifies their designation, wages, and employment category.
4. Comply with working-hour limits: Observe the prescribed 8-hour daily and 48-hour weekly limits, or any permitted alternative working pattern.
5. Pay and record overtime: Pay overtime at twice the normal wage rate, record it separately, and monitor the applicable quarterly limit.
6. Track leave eligibility: Maintain records from the date of joining and monitor the 180-day qualifying period for paid leave.
7. Maintain inspection-ready records: Keep registers, wage records, attendance records, and other prescribed documents readily available for inspection.
8. Monitor legal developments: Track the Repeal Bill and subsequent notifications or rules issued by the state.

Conclusion

Bihar’s shops and establishments framework is transitioning from the older state-specific regime to the central Labour Code. Employers should proactively review their obligations under the Labour Codes and Bihar rules to ensure full compliance.

Businesses should maintain accurate employment records, timely registrations or filings, compliant payroll practices, and updated HR policies. Keeping these systems adaptable will help employers respond to further changes in Bihar’s labour-law framework.

Frequently Asked Questions

Do Shops and Establishments in Bihar have to Pay Professional Tax?

Yes, where applicable. Professional tax in Bihar is a separate state levy and applies independently of the shops and establishments framework.

What is the Minimum Wage for Shop Employees in Bihar?

Minimum wages are prescribed separately through applicable wage notifications and are not determined by the shops and establishments legislation. Employers should verify the latest minimum wages in Bihar before processing payroll.

Which Holidays Must Establishments in Bihar Provide?

The OSH Code leaves national and festival holiday declarations to state-specific notifications. Employers should consult the annually published Bihar Gazette holiday list to determine mandatory paid holidays for their workplace calendar.

Are Establishments in Bihar Required to Provide PF, ESI, and Bonus?

These obligations arise under the applicable central social security and wage legislation. Their applicability generally depends on factors such as employee strength and prescribed wage thresholds, rather than solely on the shops and establishments framework.

Where Can I Access the Official Documents?

The Act is available through PRS Legislative Research. The repeal ordinance was published in the Bihar Gazette (Extraordinary) on 1 June 2026, while the applicable Labour Code framework is explained in the relevant PIB materials.

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