The Government of Gujarat, has introduced significant amendments to the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019. Through a ordinance dated December 16, 2025. The ordinance reflects the State’s continuing effort to recalibrate labour regulation in line with evolving business models while preserving essential employee protections.
The amendments primarily address four critical compliance dimensions: applicability thresholds, working hours, overtime limits, and conditions governing women’s employment during night shifts. Collectively, these changes redefine the regulatory landscape for establishments operating within Gujarat and require careful legal and operational assessment by employers.
Applicability increased from 10 to 20 employees
One of the most consequential amendments is the enhancement of the employee threshold for applicability of the Act from ten to twenty workers. Establishments employing fewer than twenty persons are now excluded from the Act’s ambit.
This amendment significantly reduces statutory compliance exposure for micro and small enterprises. The policy intent appears to be twofold: first, to encourage ease of doing business by reducing regulatory friction; and second, to allow enforcement resources to be concentrated on larger establishments where labour risks are comparatively higher.
However, establishments transitioning out of coverage must exercise caution in maintaining minimum standards under other applicable labour statutes, as exemption under the Shops and Establishments Act does not dilute obligations under other Acts like Code on wages 2019 and Social Security Code 2020 etc.
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Expansion of Working Hours and Rest Interval Framework
The ordinance increases the permissible daily working hours from nine to ten and extends the continuous work limit before a rest interval from five to six hours. At the same time, it retains the twelve-hour spread-over limit.
Legally, this adjustment reflects a pragmatic shift toward flexibility without abandoning worker protection. The spread-over ceiling operates as a safeguard against indirect overwork through fragmented scheduling. Employers must therefore ensure that shift structures comply with both parameters simultaneously.
Non-compliance in scheduling could expose employers to statutory penalties and potential labour disputes, particularly in sectors involving long shifts such as logistics, manufacturing support services, and IT-enabled operations.
Overtime Limit Increased
The quarterly overtime ceiling has been raised from 125 to 144 hours. While this change provides employers with greater latitude during peak business cycles, it simultaneously heightens the importance of accurate payroll and attendance systems.
From a compliance perspective, overtime mis classification or underpayment may now attract greater scrutiny due to the expanded permissible limit. Employers must therefore ensure Proper overtime authorisation mechanisms, Accurate recording of overtime hours and transparent wage calculations
Failure in these areas could give rise to wage claims/disputes, inspections, and reputational consequences.
Women Night working permissible
The ordinance formally permits women employees to work between 9:00 p.m. and 6:00 a.m., subject to mandatory safeguards. This amendment is legally significant as it moves from protective restriction toward rights-based inclusion.
However, the permission is conditional and compliance-intensive. Employers must secure written consent and implement comprehensive safety, transportation, sanitation, childcare, and harassment-prevention measures.From a legal risk perspective, any lapse in safety arrangements or consent documentation may expose employers to liability under labour law, criminal law, and sexual harassment legislation. Accordingly, night-shift deployment of women employees should be governed by clearly documented internal protocols supported by periodic audits.
Impact and Employers Obligations
The amendments necessitate immediate legal and operational recalibration across organisations.
Small establishments must reassess applicability status and revise compliance registers accordingly. Larger employers must update working hour policies, overtime frameworks, and night-shift protocols.
No Change in Minimum Wage Regime
It is legally important to note that the ordinance does not affect minimum wage provisions. Wage obligations continue to arise under the Code on Wages, 2019 and state notifications. Employers must therefore treat wage compliance as an independent statutory responsibility.
