Uttar Pradesh enhances coverage for employees and applicability limits for registration of commercial establishments

At a glance

• Uttar Pradesh has enacted the Uttar Pradesh Dookan Aur Vanijya Adhishthan (Sanshodhan) Adhiniyam 2025 (UP S&E Amendment Act) thereby repealing the Uttar Pradesh Dookan Aur Vanijya Adhishthan (Sanshodhan) Ordinance 2025.
• UP S&E Amendment Act, which came into effect from November 19, 2025, amends certain key provisions of the Uttar Pradesh Dookan Aur Vanijya (Adhishthan) Adhiniyam, 1962 (UP S&E Act), starting with the definition of ‘commercial establishment’ thereunder, which has been expanded to include establishments of any medical practitioner, architect, service providers including delivery services, amongst others. The definition of ‘employee’ has also been expanded to include persons engaged through outsourcing agencies for manual, unskilled, skilled, technical, operational or clerical work.
• It has introduced operational flexibility for employers by increasing working hours limits and overtime limits. Further, the UP S&E Amendment Act has significantly enhanced penalties to bring a stricter compliance check.
• It also provides for a pre‑prosecution ‘improvement notice’ mechanism, requiring inspectors to grant employers 15‑days’ opportunity to cure non‑compliances before initiating prosecution for certain offences.

We would like to express gratitude to JSA for their contribution on this publication.

The UP S&E Amendment Act narrows the scope of the UP S&E Act by limiting its applicability and registration requirements to establishments employing 20 or more employees, as opposed to the earlier coverage of all establishments. From a working hours perspective, the UP S&E Amendment Act enhances operational flexibility by increasing the daily working hours limit from eight to nine hours and substantially raising the permissible overtime threshold to 11 hours per day and 144 hours per quarter, as opposed to the earlier limits of up to ten hours per day and 50 hours in a quarter.

UP S&E Amendment Act also revises the framework governing employment of women during night shifts, expanding the time window to 7pm to 6am from 9pm to 6am, and mandating additional amenities such as food canteen facilities, alongside safety provisions, transportation, restrooms and night crèches. From an enforcement standpoint, the UP S&E Amendment Act marks a clear shift towards stricter compliance by significantly enhancing penalties, increasing maximum limits of fines for first offences from INR100 to INR2,000, and for subsequent offences from INR500 to INR10,000.

The UP S&E Amendment Act has also introduced an 'improvement' option prior to prosecution for offences under the UP S&E Act (except for those offences under Section 20(1) of the UP S&E Act, which relate to termination of employment by employee without following proper processes). The inspector appointed under the UP S&E Act will provide an opportunity to the defaulting employer to comply with the provisions of the UP S&E Act, by issuing a 15 days’ written improvement notice. If employer complies with the direction, then prosecution will not be initiated. That said, no such opportunity for improvement will be provided if a repetition of non-compliance is committed within a period of five years from the date of the first non-compliance. The UP S&E Amendment Act does not, however, clarify the processes that existing establishments may be required to undertake while in possession of a subsisting registration.