What happened
The Karnataka Shops and Commercial Establishments (Amendment) Act 2026 received the Governor's assent on 3 September 2026, was published in the Karnataka Gazette on 4 September 2026, and came into force at once.
It amends the Karnataka Shops and Commercial Establishments Act 1961. That Act is a state law and was not repealed by the Labour Codes. It governs registration, working hours, leave, holidays and registers for shops, offices, IT/ITES units, hotels, restaurants and theatres across the state.
The key changes
1. Registration is valid until closure, so renewal is abolished
A certificate issued under s.4 now remains valid until the establishment closes or ceases business. The renewal requirement has been removed.
- Before: a five-year certificate, with renewal applied for 90 days before expiry.
- Now: Rule 3-A of the 1963 Rules has not yet been formally amended, but the Act prevails.
- Expired certificates: establishments whose certificate had lapsed before 4 September 2026 without renewal should regularise on e-Karmika. The amendment does not revive an expired certificate by itself.
Because registration now lapses only on closure, the closure intimation (within 15 days of closing) and the notice of change (within 15 days of the change, now electronic) become the main events in the life of a registration.
2. Exemption for OSH-registered establishments with 10+ workers
Establishments employing 10 or more workers that are already registered under the OSH&WC Code 2020 are added to the list of establishments to which the Act does not apply for registration. This removes duplicate registration for establishments that have a common registration on Shram Suvidha. Godowns and storage within 100 metres of the principal establishment need no separate registration.
The exemption covers registration. Check with advisers whether other duties, such as the Form U return, holidays and registers, still apply to your establishment under the state Act or the OSH Code. Until the OSH&WC (Karnataka) Rules are final, a cautious reading keeps the Karnataka registers and returns running.
3. Faster, digital processing
- Applications, certificates and notices are processed electronically.
- The time for deciding an application under s.4(3A) falls from 30 days to 7 days, after which deemed registration applies.
4. New employee protections
- New ss.6-B and 6-C: employers may not retain employees' original educational certificates, experience certificates or other original documents.
- A service certificate must be issued within 7 days of the employee's request.
Many IT and BPO onboarding practices collect originals "for verification". Change them to sighting originals and keeping copies.
5. Higher penalties and compounding
| Contravention | Earlier | After the 2026 Amendment |
|---|---|---|
| General contraventions (s.30(1)) | Lower fines | ₹3,000 – ₹5,000 |
| Continuing / other offences (s.30(2)) | Lower fines | ₹2,000 |
| Contraventions under ss.24–25 | Lower fines | Minimum ₹10,000 |
| Obstructing an Inspector (s.33) | ₹500 | ₹10,000 |
| Compounding | — | 50% of the fine for a first offence; 75% for a repeat within one year |
References to the old wage and compensation Acts have been aligned to the Code on Wages 2019 and the Code on Social Security 2020.
Who is affected
- All registered Karnataka shops and establishments. Stop tracking renewal dates, and keep the certificate displayed.
- Establishments with lapsed certificates. Regularise now.
- Employers with 10+ workers on Shram Suvidha. Decide whether to rely on the exemption for new locations. Keep evidence of the OSH registration covering the Karnataka premises.
- HR teams. Update onboarding (original documents) and exit processes (service certificate in 7 days).
Karnataka compliance calendar (key items)
| When | What | Law / form |
|---|---|---|
| 20th monthly | PT deposit and statement (₹200; ₹300 in February, for pay of ₹25,000+) | KA PT Act 1976, Form 5-A |
| 15th monthly | PF ECR (Form VII) and ESI contribution | Code on Social Security |
| 7th monthly | Wages paid for the previous month | Code on Wages s.17 |
| Within 30 days of starting | S&CE registration, Form A on e-Karmika. PT employer registration | KA S&CE Act s.4; KA PT Act |
| Within 15 days of a change or closure | Notice of change / closure | KA S&CE Rules |
| 15 January | LWF: ₹50 + ₹100 per employee on the 31 December register, with Form D (10+ persons from 7 Jan 2026) | KA LWF Act 1965 |
| 31 January | Form U combined annual return | KA S&CE Rules |
| 1 February | Factories combined annual return, Form 20 (factories) | KA Factories Rules 1969 |
| 30 Jan / 30 Jul | Contractor half-yearly return, Form XXIV | KA CLRA Rules 1974 |
| Before 31 December | Display the National & Festival Holidays list for the next year | KA N&FH Act 1963 |
| Annually | Renew the compulsory gratuity insurance policy, where applicable | KA Compulsory Gratuity Insurance Rules 2024 |
Karnataka published draft rules under all four Labour Codes on 23 January 2026. Until they are final, the state's legacy rules and forms continue.
What employers should do
- To do: Remove the S&CE renewal from your compliance tracker, but regularise any certificate that expired before 4 Sep 2026.
- To do: File notices of change within 15 days, and a closure intimation within 15 days of closing.
- To do: For new Karnataka premises with 10+ workers, decide between Form A and relying on the OSH Code registration. Document the decision.
- To do: Stop retaining original certificates. Update policies and the onboarding checklist.
- To do: Add a 7-day SLA for service certificates to the exit process.
- To do: Keep the Form U (31 January) and LWF Form D (15 January) filings in the calendar.
Effective dates at a glance
| Date | Event |
|---|---|
| 7 Jan 2026 | Karnataka LWF applies to 10+ persons |
| 23 Jan 2026 | Draft Karnataka rules under the four Codes published |
| 3 Sep 2026 | Governor's assent to the S&CE (Amendment) Act 2026 |
| 4 Sep 2026 | Gazetted and in force: renewal abolished, OSH exemption, new penalties |
General information, not legal advice. Last reviewed 27 Sep 2026.