The Government of Bihar introduced the Bihar Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2025 (“Bihar Shops Act“), on August 12, 2025, replacing the earlier Bihar Shops and Establishments Act of 1953. This new legislation applies to all shops and commercial establishments employing 10 or more workers, excluding those primarily engaged in managerial or administrative roles as defined under Section 2(k) of the Bihar Shops Act. The Bihar Shops Act introduces several obligations for employers, including mandatory registration of establishments, salary disbursement directly into employees’ bank accounts, issuance of service cards, and advance notice before termination or discharge of employees. A notable feature of the enactment is the introduction of web-based inspections conducted by appointed facilitators. Penalties for violations have been significantly enhanced: first-time offences attract fines between Rs. 10,000 and Rs. 25,000, while repeat offences may incur fines ranging from Rs. 20,000 to Rs. 50,000. In cases where a violation leads to serious workplace injury or fatality, the employer may face imprisonment of up to 6 months, a fine between Rs. 2,00,000 and Rs. 5,00,000, or both. Additionally, the enactment allows for compounding of offences, providing a mechanism to settle certain violations without formal prosecution.
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