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Puducherry Shops and Establishments Act: Registration & Key Rules

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The commercial sector in Puducherry is governed by the Puducherry Shops and Establishments Act, 1964. It governs registration, working hours, leave, and penalties for shops and commercial establishments. Since August 2025, establishments employing 50 or more persons are permitted to operate 24/7 (round-the-clock), and since March 2026, establishments registered under the OSH Code are exempt from the Act.

What is the Shops and Establishments Act in Puducherry?

The Puducherry Shops and Establishments Act, 1964, regulates employment conditions in shops and commercial establishments across the Union Territory. The Puducherry Shops and Establishments Rules, 1964, prescribe the related forms, fees, and procedures.

The law covers:

• Registration Requirements: Governing application submissions, certificate issuance, annual renewals, and notices of operational changes.
• Working Conditions: Regulating daily/weekly limits, overtime computation, mandatory rest intervals, and weekly closures.
• Employee welfare: Leave entitlements, dismissal protections, and workplace conditions.
• Compliance: Prescribed records, inspection requirements, and penalties for violations.

The 2025 and 2026 notifications have changed the application of the Act. Establishments with fewer than 50 employees are exempt under the August 2025 order, while establishments registered under the OSH Code are covered by a separate exemption, subject to its conditions.

What Changed since 2022: A Timeline

Recent government notifications have changed the Act’s exemptions and rules for round-the-clock operations.

Which Law Applies Today?

The Puducherry Shops and Establishments Act, 1964, remains relevant, but recent exemptions have changed which establishments are subject to it. The four central Labour Codes came into force on 21 November 2025, and Puducherry has since released draft rules under the Code on Wages and the OSH Code. These draft rules remain pending final notification.

1. Establishments with Fewer Than 50 Employees

A government order issued on 14 August 2025 exempts establishments with fewer than 50 employees from the Act.

• These establishments are exempt from the Act’s requirements, including registration and working-hour provisions.
• Employers should check whether any other applicable labour laws or conditions still apply.

2. Establishments with 50 or More Employees

A separate order issued on 14 August 2025 sets revised working-hour and rest limits for these establishments:

• Daily working hours: Up to 12 hours.
• Weekly working hours: Up to 48 hours.
• Overtime: Up to 180 hours per quarter, subject to applicable payment requirements.
• Rest breaks: Two 30-minute breaks after every four hours of work.

Another order issued on the same date permits eligible establishments to operate 24×7, subject to specified conditions.

The orders use different terms to define the employee threshold. Employers should confirm with the Puducherry Labour Department how the threshold applies to their establishment.

3. Establishments Registered under the OSH Code

A government notification issued on 15 March 2026 exempts shops and establishments registered under the Occupational Safety, Health and Working Conditions Code, 2020, from the provisions of the Puducherry Act, subject to the conditions set out in the notification.

Before relying on this exemption, employers should confirm:

• How to register under the OSH Code and which authority handles registration.
• Whether their establishment qualifies for the exemption.
• Which requirements apply if more than one exemption covers their establishment.

Because current notifications do not explicitly address how overlapping exemptions interact, employers should obtain written clarification from the Puducherry Labour Department before altering operational practices.

Puducherry Shops and Establishments Act 1964: Key Limits at a Glance

Puducherry Shop Registration under the Act

Who Must Register and when

Where statutory registration is required, employers must submit Form I to the jurisdictional Area Inspector within 30 days of commencing operations.

The Puducherry Labour Department provides details on the registration procedure and fees. The registration certificate is valid for one financial year and must be renewed.

Establishments covered by a valid exemption do not need to register under the Act. Employers should retain documents supporting their exemption.

Fees for Puducherry Shop Registration

The registration fee depends on the number of persons employed. Renewal fees are the same as registration fees.

Employers may also opt to pay registration or renewal fees for a block period of up to 3 consecutive years.

Changes and Closure

Employers must notify the area Inspector of changes to establishment details within 7 days and report closure within 10 days. Keep the registration certificate and relevant records available for inspection.

Hours, Overtime and Opening in Puducherry

Working Hours and Overtime

Under the general rules, employees may work up to 8 hours a day and 48 hours a week. Overtime may extend these limits to 10 hours a day and 54 hours a week, at twice the ordinary rate.

Other requirements include:

• Rest interval: One hour of rest after four hours of work.
• Spread-over: Up to 12 hours, including rest intervals.
• Multiple employment: Restrictions apply to working in two establishments on the same day.

Establishments employing 50 or more workers are subject to the modified daily working-hour limits and quarterly overtime thresholds outlined under the August 2025 Order.

Puducherry 24×7 Opening Rules

The August 2025 order permitted establishments with 50 or more persons to operate throughout the year, subject to conditions. A later order issued in March 2026 introduced a broader 24×7 permission, subject to its terms.

The applicable conditions include:

• Weekly rest: Provide a rotating day off each week and record it in Form IX.
• Holiday and leave records: Display details of employees on holiday or leave.
• Mandatory Direct Deposit: All wages, including statutory overtime compensation, must be remitted directly into employees’ individual bank accounts. A clear payroll cycle helps manage these payments.
• Overtime authorization: Maintain an overtime indent for work outside normal hours, as required by the applicable order.

Weekly Holidays and Leave

The Act and Rules provide for weekly rest and employee leave, subject to applicable exemptions.

• Weekly closure: Shops must close one day a week. The designated day may be changed no more than once every three months.
• Earned leave: 12 days after 12 months of service, with accumulation up to 24 days.
• Sick leave: 12 days.
• Casual leave: 12 days.

Employers should distinguish unpaid absence from paid leave and define the applicable process for leave without pay.

Women’s Night Work in Puducherry

Under the 24×7 operating permission, women may work between 8 p.m. and 6 a.m., subject to the applicable conditions:

• Written consent: Obtain consent from each woman working night shifts.
• Maternity protection: Comply with the Maternity Benefit Act, 1961.
• Workplace safety: Provide adequate lighting in work areas, passages, toilets, washrooms, and entry and exit points.
• Basic facilities: Ensure access to toilets, washrooms, and drinking water.
• Security: Install CCTV for safety and security.
• Prevention of harassment: Comply with the Sexual Harassment of Women at Workplace Act, 2013, wherever applicable.

Unlike certain state frameworks, the current order does not explicitly mandate employee transportation or a minimum number of female staff per shift. However, employers should verify the latest notifications from the Puducherry Labour Department to ensure full compliance with operational requirements.

Penalties under the Act

The statutory penalties under the Act are summarized below; employers should refer to the latest Gazette notifications for any recent administrative revisions.

Compliance Checklist for Employers in Puducherry

• Confirm applicability: Check whether the establishment is covered by the Act or qualifies for an exemption.
• Complete registration: Submit Form I within 30 days of starting business, where required, and renew the certificate on time.
• Follow working-hour limits: Comply with applicable daily and weekly hours, overtime limits, and rest intervals.
• Maintain employee records: Keep attendance, leave, and overtime registers up to date to support internal audits and statutory inspections. Use an absenteeism policy to track unexplained absences.
• Provide statutory benefits: Ensure weekly holidays and applicable earned, sick, and casual leave entitlements.
• Process payroll accurately: Calculate overtime wages at the statutory double-rate and apply the current Puducherry Professional Tax slab rates to all eligible salaries.
• Meet night-shift requirements: Obtain written consent from women working at night and provide the prescribed safety measures.
• Report changes and closure: Notify the Inspector within 7 days of changes and 10 days of closure, where applicable.
• Track legal updates: Monitor government notifications and final labour code rules to keep compliance procedures up to date.

Conclusion

The Puducherry Shops and Establishments Act, 1964, along with recent regulatory updates from 2025–2026, forms the core operational framework for commercial establishments in the region. Employers must align shift scheduling, leave tracking, and health and safety measures with updated state notifications and upcoming Labour Code rules.

As Puducherry finalizes its labour-code rules, monitoring official notifications will help employers keep their compliance procedures up to date.

Frequently Asked Questions

Can an Employer Dismiss a Shop Employee without Notice in Puducherry?

An employee who has completed 6 months of continuous service is entitled to 1 month’s notice or wages in lieu of notice. However, immediate dismissal is permitted if misconduct is established following a formal domestic inquiry. Employees reserve the right to appeal an unlawful termination under the Act.

How is Leave Pay Calculated for a Shop Employee in Puducherry?

Leave pay is calculated based on the employee’s average daily wages earned over the preceding 3 months, excluding overtime payments. Employers must maintain accurate attendance and wage registers to support these calculations.

Can a 16-Year-Old Work in a Shop in Puducherry?

Yes, a 16-year-old may be employed subject to statutory provisions governing young persons. Working hours are restricted to a maximum of 7 hours per day and 42 hours per week, with a strict prohibition on work between 7 PM and 6 AM. Overtime work is strictly prohibited.

Can an Employee Appeal against Dismissal under the Puducherry Shops and Establishments Act?

Yes. An employee who contends that their dismissal violates statutory provisions may file an appeal with the prescribed appellate authority. Employers should retain comprehensive inquiry records and written termination notices to defend their disciplinary actions.

What Should Employers Check before Claiming Exemption under the OSH Code?

Employers must verify that their establishment is properly registered under the Occupational Safety, Health and Working Conditions (OSH) Code and fulfills all regulatory conditions set out in G.O. Ms. No. 3 (dated 15 March 2026). They should also confirm procedural guidelines directly with the Puducherry Labour Department.

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