Business owners while starting out are ambitious and zealous to grow and succeed but are often unaware of the legalities concerning their business. Entrepreneurs need to know of the requisite registrations and licences required for that particular business, ideally before they start their business.
One such compliance that is applicable to most businesses is the Shop Act. Many businesses actually require a Shop Act and are eligible for it too but the lack of information about it.
A Shop Act can either be licence or registration for businesses and was established to protect and regulate the work conditions of employees in commercial establishments. With this intention of regulating the conduct of commercial establishments, the jurisdiction of the various States introduced the Shop And Establishment Act in India. The term “Shop” includes wholesale and retail shops, stalls, markets, warehouses, malls, refreshment houses, public houses, etc. where employees or assistants are hired. The Act regulates various aspects of workers at these places, such as payment of wages, hours of work, leave, holidays, terms of service, etc.
The Maharashtra Shop Act, for the State of Maharashtra, was originally introduced in the year 1948 and was recently replaced by the updated Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 and was the first State in the country to draft the new Act.
Eligibility For The Maharashtra Shop and Establishment Act, 2017
As per The Maharashtra Shop and Establishment Act 2017, businesses need to register for and obtain the licence of Shop Act if they fulfil the eligibility criteria mandated for commercial establishments. Those who fulfil the criteria are eligible for a licence and otherwise, all commercial establishments and businesses need to register themselves under the Shop Act, although they do not need a licence.
The basic requirement for being eligible for the Maharashtra Shop and Establishment Act is that all the firms and commercial establishments, that are not covered under the Factories Act and that employ 10 workers or more, must apply for and procure the Shop Act licence. This application must be carried out within 30 days of commencing operation of the specific business. The validity period of this registration can be decided by the commercial entity itself but it cannot exceed more than 10 years. Additionally, another criteria for eligibility is that the establishment must be located with the municipal limits of the cities of Maharashtra.
There were additions made to the Maharashtra Shop Act 2017 in the year 2018 with new rules that were beneficial to the commercial establishments and allowed them to conduct their business with more flexibility as it promotes transparency by bringing clarity to the rules and its implementation along with ease of compliance of the rules.
Application For Maharashtra Shop And Establishment Act
Under the Act, any commercial establishment or shop within the State of Maharashtra must apply for the licence by submitting an application to the local Shop Act inspector or can even be carried out online since all the records are maintained electronically. The application process along with the required Shop Act registration documents must also include-
- Name of the employer and the manager, if there is one appointed
- The postal address of the shop or establishment
- The name of the establishment
- The category of the establishment, i.e., whether it is a shop, or a commercial establishment, or residential hotel, or restaurant, eating house, theatre or other places of public amusement or entertainment
Key Features Of The Maharashtra Shop And Establishment Act
The Shop Act has certain rules that specify the way to conduct business and the new rules introduced in 2017 and 2018 have a positive impact on businesses. The key features of these Acts are discussed here.
- As per the rules, certain establishments such as restaurants, movie theatres, financial institutions, retail outlets, medical practices, etc. However, under this law, any establishment selling alcohol or cigarettes is excluded from staying open beyond the stipulated deadline.
- Under the laws, the working hours for employees are not supposed to exceed 9 hours a day and must be less than 48 hours per week. In case the time exceeds, the employers have to pay their workers double the wage amount as over time.
- Discrimination against women is prohibited as per the law, in matters concerning the wages, promotion, recruitment and training. Also, keeping safety in mind, women workers are supposed to work between 7am and 9.30 pm. However they can work beyond these timing, in cases of emergencies, provided the workplace is safe and arrangements are made for transportation of the women to and from work. Also, it is mandatory as per the 2018 regulations to have women security guards at establishments where there are a minimum of 10 women working in the premises.
- Welfare of workers is also given the due importance under the new Act, which stipulates that adequate arrangements are made for the safety as well as the health of the workers. The other areas considered vital under health and safety include cleanliness, hygiene, ventilation, and lighting.
- Leaves and absence from work rules are also mandated according to which workers are eligible to eight casual leaves, and can accumulate 45 days of paid leave during a year. Also, the establishment will declare eight days as paid festival holidays, which includes the four national holidays.
- Safety measures are also stressed upon under the regulations of the Act and include-
- Provision be made for first-aid facilities in the workplace
- Provision and maintenance of sufficient and clean drinking water at suitable points, conveniently situated for all persons employed in the establishment
- Provision made for washroom facilities for men and women
- For establishments that employ 50 or more workers provision must be made for crèche facility for the use of children of such workers
- For establishments that employ 100 or more workers provision must be made to have and maintain a canteen for the use of its workers
The Shop Act is a boon to MSME as it helps them regulate their working and provides them with the flexibility to do business.