In a landmark move aimed at easing the regulatory burden on small business owners, the Punjab Cabinet led by Chief Minister Bhagwant Singh Mann has approved sweeping amendments to the Punjab Shops and Commercial Establishments Act, 1958. This reform initiative positions Punjab as the first state in India to legally exempt shopkeepers employing up to 20 workers from the rigid framework of existing labour laws.
The decision, taken during a cabinet meeting held at the Chief Minister’s official residence, is being hailed as a game-changer for over 95 percent of Punjab’s small businesses. The amendments are designed to reduce red tape, streamline compliance procedures, and curb harassment, while ensuring the rights of workers remain protected.
Under the revised law, all shops and commercial establishments with up to 20 employees will now be exempt from most of the act’s provisions. However, these businesses will be required to submit basic information to the Labour Department within six months of launching operations or from the date the amendment takes effect. The government believes this will bring substantial relief to lakhs of small retailers and traders across the state.
In another major shift, the law now allows daily working hours to be increased from 10 to 12 hours — inclusive of rest breaks — thereby providing operational flexibility to businesses. Overtime compensation has also been made more transparent and fair. Employees working more than nine hours a day or 48 hours a week must be paid at double the normal wage rate. Additionally, the quarterly cap on permissible overtime has been raised from 50 to 144 hours.
For establishments with 20 or more workers, the registration process has been automated and simplified. Such businesses will now receive registration within 24 hours of application submission, eliminating bureaucratic delays. Meanwhile, those with fewer than 20 employees will only need to provide essential details and will be exempt from the burden of maintaining registers.
The amendments also bring long-overdue rationalization to the penalty system. The minimum fine has been increased from a mere ₹25 to ₹1,000, and the maximum fine has been revised from ₹100 to ₹30,000, reflecting a more realistic and enforceable penalty structure. Traders will now have a three-month window to address compliance issues before facing repeat penalties, and the introduction of Section 26A will allow for the compounding of violations. This key reform shifts the focus from criminalizing infractions to enabling resolution through administrative processes, sparing small business owners the ordeal of prolonged court proceedings.
Crucially, the Punjab government has reiterated that workers’ entitlements under various labour laws will remain fully protected. This ensures that while the burden on employers is reduced, the rights and welfare of the workforce will not be compromised.
This progressive step is part of the Mann government’s broader agenda to promote ease of doing business in Punjab, especially for micro and small enterprises, which are often caught in a web of complex and outdated regulatory norms. With this bold legislative change, the state aims to encourage entrepreneurship, promote formalization, and build a more dynamic and inclusive economic environment.
This is a web-generated premier news story.
#PunjabLabourReform #EaseOfDoingBusiness #BhagwantMann #SmallBusinessRelief #LabourLawsIndia #ShopkeepersRights #PunjabCabinetDecision #EmploymentReforms #BusinessFriendlyPunjab #WebNewsIndia #DigitalGovernance #LabourReforms2025
