The Punjab Cabinet, led by Chief Minister Bhagwant Singh Mann, Wednesday approved a landmark amendment to the Punjab Shops and Commercial Establishments Act, 1958, aimed at significantly reducing compliance burdens for 95 per cent of small businesses and enhancing the ease of doing business across the state.

The decision was taken during a meeting of the Council of Ministers held at the Chief Minister’s official residence.

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A spokesperson from the Chief Minister’s Office stated that, under this progressive reform, all establishments employing up to 20 workers will be exempt from all provisions of the Act.

This move is expected to directly benefit lakhs of small shopkeepers across Punjab. However, such establishments will still be required to submit basic information to the Labour Department within six months of either the Act coming into force or the commencement of business.

In a step to improve employee compensation, the permissible overtime limit per quarter has been increased from 50 hours to 144 hours. Furthermore, the daily spread-over period of work has been extended from 10 hours to 12 hours, inclusive of rest intervals. Employees must continue to receive overtime pay at double the normal rate for work exceeding 9 hours per day or 48 hours per week.

The registration process has also been streamlined. Establishments with 20 or more employees will now receive deemed approval for registration within 24 hours of application submission. Those employing up to 20 workers will only need to furnish basic information and are not required to undergo formal registration.

Penalties under Sections 21 and 26 of the Act have been rationalised, with the minimum fine increased from Rs 25 to Rs 1,000 and the maximum from Rs 100 to Rs 30,000.

To prevent undue harassment and give businesses adequate time to comply, a three-month grace period will be provided between the first and subsequent offences. Additionally, a new Section 26A has been introduced to allow for the compounding of offences—thereby decriminalising the Act and eliminating the need for shopkeepers to appear in court.