Labour Laws Changes: Maharashtra Eases Rules for Small Shops, Sets 20+ Employees Threshold and Longer Hours

Mumbai, 4th September 2025: The Maharashtra government is set to significantly reduce the number of units governed by the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017. The state cabinet approved amendments on Wednesday that will make the law applicable only to establishments employing 20 or more workers, up from the current threshold of 10.

Currently, around 85 lakh shops and establishments fall under this legislation. Following the change, the number of covered units will drop sharply to roughly 56,000. However, labour laws related to social security, including the Minimum Wages Act and Maternity Benefit Act, will still apply to smaller units, officials said.

The cabinet also approved changes to the Maharashtra Factories Act, 1948. Since the Factories Act is a central legislation, these amendments will require both state legislative approval and presidential assent before taking effect.

“This deregulation will benefit both employers and workers by providing greater operational flexibility and encouraging employment growth,” said I A Kundan, Maharashtra’s Labour Secretary. “It will also make it easier for individuals to set up small businesses, which in turn should create more job opportunities.”

The amendments will allow working hours in shops and establishments to be extended from 9 to 10 hours per day, while factory working hours may increase from 9 to 12 hours daily. Any additional hours worked beyond the standard will be treated as overtime and paid at twice the basic wage plus allowances.

Weekly working limits will remain at 48 hours, while maximum overtime will be capped at 60 hours per week. Additionally, the amendments raise the overtime ceiling over a three-month period to 144 hours — up from 100 hours under the Factories Act and 125 hours under the Shops and Establishments Act.

Kundan added, “If the total working hours and overtime are completed in four days, the remaining two days must be provided as paid leave. This will help maintain work-life balance for employees.”

Viren Shah of the Federation of Retail Traders Welfare Association welcomed the changes, saying, “Small shops will no longer have to register with the government or deal with excessive paperwork. At the same time, adequate protections for employees have been maintained.”