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Shops and Establishments Act in Jammu & Kashmir: Key Rules

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The Shops and Establishments Act in Jammu & Kashmir is now the Jammu and Kashmir Shops and Establishments (Licensing, Regulation of Employment and Conditions of Service) Act, 2025. It replaces the 1966 Act following the Government’s official notification on 6 August 2026. It establishes an eight-hour workday, caps overtime at 144 hours over 3 months, and makes registration optional for businesses with fewer than 20 employees.

What is the Shops and Establishments Act in Jammu & Kashmir?

The Jammu and Kashmir Shops and Establishments (Licensing, Regulation of Employment and Conditions of Service) Act, 2025 is the principal legislation regulating shops and establishments in the Union Territory. It replaces the earlier Jammu and Kashmir Shops and Establishments Act, 1966, and establishes requirements relating to:

• Registration and licensing
• Working hours, rest intervals, and weekly holidays
• Overtime and wages
• Leave and employment conditions
• Women’s employment and night work
• Employment records and registers
• Inspection, enforcement, and penalties

The 2025 Act introduces a more contemporary compliance framework for employers while prescribing standards for working conditions and employee welfare.

Evolution of the Framework (1966 to 2026): A Timeline

Jammu & Kashmir’s shops and establishments framework has undergone a major transition, with the 2025 Act coming into force in August 2026, followed shortly by new OSH Rules.

Key Takeaway: The 2025 Act is now the operative legislation governing shops and establishments in Jammu & Kashmir, supported by the newly notified OSH Rules, 2026.

Which Law Applies Today?

The Jammu and Kashmir Shops and Establishments Act, 2025 came into force on 6 August 2026. It has therefore replaced the 1966 Act as the applicable law for shops and establishments in the Union Territory.

Existing registrations under the 1966 Act are treated as registrations under the 2025 Act, subject to its requirements. The OSH Code also applies according to its own coverage and thresholds, alongside the State framework.

Employers should immediately align their operations with the 2025 Act and its corresponding rules while continuing to evaluate applicable obligations under the OSH Code.

The Earlier Rules and the New Rules Compared

The 2025 Act introduces significant changes to registration, working hours, overtime, and compliance requirements.

Consequently, the 2025 Act transitions the regulatory framework toward online registration, extended certificate validity, and defined limits on working hours and overtime.

Who Must Register under the Act?

The 2025 Act requires shops and establishments to complete online registration within 60 days of commencing business by submitting the prescribed application, documents, and fee to the Inspector-cum-Facilitator.

• Establishments with fewer than 20 employees: Registration is optional, but other applicable duties under the Act remain in effect.
• Certificate validity: The initial certificate may remain valid for up to 10 years, while renewals may be extended for up to 5 years, subject to the prescribed fee and any applicable late fee.
• Display: The registration certificate must be displayed on the premises and produced upon request.
• Cancellation: Authorities may cancel a registration following a fair hearing if it was obtained through misrepresentation, suppression of material facts, or forged documentation.
• Closure: The Inspector-cum-Facilitator must be notified within 30 days of closure.
• Records: Required records may be maintained electronically or in physical form, but a signed hard copy must be produced during inspection.

A reliable labour report can help maintain accurate employee records and keep inspection documentation readily available.

Hours, Overtime and Leave

Under the 2025 Act, an adult worker may work up to 8 hours a day and 48 hours a week. A break of at least 30 minutes is required after 5 hours of work. Total shift hours, including rest intervals, may not exceed 10.5 hours, although urgent or intermittent work may extend the spread-over to 12 hours.

Employers must provide each worker with the weekly work schedule in writing and submit a copy to the Inspector-cum-Facilitator.

Overtime

Work beyond 8 hours a day or 48 hours a week constitutes overtime, subject to a maximum of 144 hours in any 3-month period. Overtime and work performed on a weekly rest day are payable at twice the ordinary rate, or at a higher prescribed rate where applicable.

Employers should maintain an accurate overtime record for each worker to monitor the quarterly limit.

Leave and Holidays

The Act provides for:

• Weekly holiday: One paid holiday per worker.
• Casual leave: 14 paid days per calendar year, with unused leave balance lapsing at year-end.
• Annual leave: Workers who complete at least 240 days in a calendar year earn 1 day of leave for every 20 days worked, up to a maximum of 30 days.
• Festival holidays: 8 paid festival holidays per calendar year, including Independence Day, Republic Day, and Gandhi Jayanti, plus 5 additional holidays agreed upon before the start of the year.
• Separation: Upon discharge, retirement, resignation, death, or permanent disability, wages for any accrued leave must be paid.

For annual leave calculations, specified periods, such as maternity leave under the Maternity Benefit Act, 1961, earned leave, lay-off days, and absences due to workplace accidents, are treated as days worked.

Women’s Night Work

The Jammu & Kashmir Shops and Establishments Act, 2025 prohibits discrimination against women in recruitment, training, transfers, promotions, and wages. An equal employment opportunity policy can help formalize these commitments.

Women may work night shifts where the employer:

• Obtains the employee’s explicit consent;
• Ensures her dignity, safety, and protection from sexual harassment; and
• Provides mandatory transportation from the establishment to her residence, as prescribed.

Round-the-Clock Operation

The Labour Commissioner may permit an establishment to operate round the clock by general or special order. The initial permission is valid for one year and may be renewed for subsequent terms of up to two years.

The principal conditions include:

• Weekly rest: At least 24 consecutive hours of paid weekly rest, with compensatory leave within 2 months where applicable.
• Shift arrangements: Rotational shifts with a maximum 12-hour spread-over.
• Security deposit: A refundable security deposit of ₹1,500 per worker, payable for two years, subject to full statutory compliance.

The Government may also exempt an establishment or class of establishments by notification, subject to the prescribed procedure.

Establishments operating rotational shifts should implement digital attendance systems to maintain tamper-proof shift rosters and compliance records.

Penalties under the Act

The 2025 Act significantly increases the penalties compared with the earlier 1966 framework.

Enforcement: The Assistant Labour Commissioner is empowered to try offenses. Complaints must generally be filed within three months of the Inspector becoming aware of the offense, or within six months in cases involving disobedience of a written order.

Compliance Checklist for Employers in Jammu & Kashmir

• Assess employee strength: Verify establishment headcount against the 20-employee statutory threshold.
• Complete registration: Apply for online registration within 60 days of applicability and display the certificate prominently.
• Monitor working hours: Enforce the 8-hour daily and 48-hour weekly limits, ensuring mandatory rest intervals are observed.
• Track overtime: Cap quarterly overtime at 144 hours and disburse overtime wages at the prescribed double rate.
• Maintain leave records: Audit statutory entitlements including weekly holidays, casual leave, annual leave, and festival holidays.
• Document night work: Maintain written consent records for female employees working night shifts along with verifiable transport and safety logs.
• Issue work schedules: Publish written weekly schedules for employees and submit copies to the Inspector-cum-Facilitator.
• Maintain inspection records: Update physical and digital registers regularly and retain signed hard copies for inspector verification.

Conclusion

The 2025 framework marks a significant shift in how Shops and Establishments in Jammu & Kashmir will be regulated, with greater emphasis on digital compliance, flexible work arrangements, and stronger employee safeguards.

As workplace models continue to evolve, Establishments that implement adaptable compliance systems, maintain accurate workforce records, and monitor regulatory updates will be better positioned to respond to future changes.

Frequently Asked Questions

What is the Status of Establishment Registrations Issued under the Repealed 1966 Act?

Registrations issued under the Jammu and Kashmir Shops and Establishments Act, 1966 are deemed to have been issued under the 2025 Act. Employers must retain their existing registration certificates and align operations with the updated requirements under the 2025 Act.

Are Shops and Establishments Permitted to Operate 24/7 in Jammu & Kashmir?

Yes, subject to an order issued by the Labour Commissioner in cases of urgency or exigency. The permission is initially granted for a period of one year and may be renewed in two-year increments, subject to statutory conditions regarding weekly rest, maximum hours, rotational shifts, and security deposits.

What Notice is Required before Terminating an Employee?

An employee who has completed at least 240 days of continuous service is generally entitled to one month’s written notice or wages in lieu of notice. Different requirements may apply where termination is based on misconduct established under the prescribed procedure. For detailed procedural requirements regarding wrongful termination and notice recovery, refer to the related cross-termination guidelines

Are Crèches and Canteens Mandatory for all Establishments?

No. These employee welfare requirements apply only when the establishment reaches the prescribed employee thresholds. A crèche and restroom facility are mandatory in establishments employing 30 or more female workers or 50 or more total workers, while a canteen is required for establishments with 100 or more workers.

Can an Employer Change an Employee’s Shift without Changing the Weekly Working-Hour Limit?

Yes. The Act permits work in multiple shifts and allows workers to be placed on rotational shifts without overlapping, subject to the prescribed conditions. The weekly hours and other statutory limits continue to apply.

What Records Must an Employer Produce during an Inspection?

Employers must maintain statutory registers, attendance logs, and work schedules in physical or electronic formats. However, signed hard copies must remain accessible on-site for immediate inspection.

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