The Karnataka Government has recently notified certain key amendments^[1] to the Karnataka Shops and Commercial Establishments Act, 1961 (“KSCEA“). The amendments have come into force with immediate effect from September 4, 2026.

The amendments introduce several key changes, amongst others, digitization of registration processes, perpetual validity of registration certificates, relaxation of conditions for women’s night shift employment, and revised penalties and provisions on compounding of offences.

We have summarized the key changes below:

• Establishments employing 10 or more workers which are already registered under the Occupational Safety, Health and Working Conditions Code, 2020 are exempt from applicability of the KSCEA;
• Registration certificates received under the KSCEA will remain valid until the closure or cessation of business of the establishment, replacing the earlier requirement of periodic renewal;
• Employers are required to issue a service certificate to an employee within 7 days from the date of receipt of the employee’s application. The format of the same will be prescribed separately;
• Employers are prohibited from retaining original educational certificates, experience certificates, or any other original documents of an employee at the time of appointment or during the course of employment;
• Some of the conditions previously stipulated for employment of women during night shifts including requirements relating to driver background checks, route planning, mobile app development, control rooms, and related safety protocols, have now been removed;
• Penalties have been significantly revised upwards;
• A revised framework for compounding of offences now permits the jurisdictional labour officer to compound any offence under the KSCEA by collecting 50% of the prescribed fine for a first offence and 75% for a second or subsequent offence; and
• In the light of notification of the new Labour Codes, references to the Payment of Wages Act, 1936 and the Workmen’s Compensation Act, 1923 in the KSCEA have been updated to refer to the Code on Wages, 2019 and the Code on Social Security, 2020, respectively (which have subsumed and replaced these laws).

[1] Karnataka Shops and Commercial Establishments (Amendment) Act, 2026 (Karnataka Act No. 38 of 2026) (“Amendment Act“), by way of a notification dated September 4, 2026