The Government of Karnataka, on August 24, 2026, issued the Karnataka Shops and Commercial Establishments (Amendment) Bill, 2026, to further amend the Karnataka Shops and Commercial Establishments Act, 1961, with the objective of simplifying registration and compliance, introducing digital processes, strengthening employee protections, rationalising penalties, and providing mechanisms for compounding and appeal. The Bill provides that the amendments shall come into force immediately upon enactment.
The following has been stated:
• Exemption from separate registration - Establishments employing 10 or more workers that are already registered under the Occupational Safety, Health and Working Conditions Code, 2020 will be exempt from separate registration under the Karnataka Shops and Commercial Establishments Act. No separate registration will be required for godowns or storage facilities located within 100 metres of the principal establishment.
• Digital registration process - Applications, payment of fees and issuance of registration certificates may be carried out through electronic or digital mode. The time limit for processing certain registration-related applications is reduced from 30 days to 7 days. Registration, once issued, will remain valid until closure or cessation of business. The existing requirement for periodic renewal is consequently removed. The penalty for failure to register is proposed to be revised from imprisonment and a fine up to ₹5,000 to a fine up to ₹50,000.
• Electronic compliance - Notifications to the Inspector regarding prescribed changes can be made through electronic or digital mode.
• Service certificate - A New Section 6-B requires every employer to issue a service certificate to an employee within 7 days of receiving the employee's application, in the prescribed form.
• Prohibition on retention of original documents - Under New Section 6-C, employers are prohibited from retaining an employee's original educational certificates, experience certificates, or other original documents at the time of appointment or during employment.
• Compounding of offences - A New Section 33-A provides for compounding of offences by the jurisdictional Labour Officer.
Please refer to the document attached below for more details.
[LA Bill No. 23 of 2026]
