The Government of Assam‘s Legislative Department has enacted the Assam Shops And Establishment (Amendment) Act, 2026, introducing significant revisions to the conditions of employment and service for workers in shops and commercial establishments across the state.
The newly enacted legislation aims to modernise labour regulations, enhancing employee welfare through improved provisions for earned leave and overtime work, while simultaneously working to streamline compliance for businesses. This move is part of a broader state initiative to foster a more business-friendly environment while safeguarding worker rights, according to official statements.
What was announced
The Assam Shops And Establishment (Amendment) Act, 2026, officially came into force immediately upon its enactment, as stated in the Bill document vetted by the Legislative Department on July 4, 2026. The Bill was introduced in the Assam Assembly by Labour Welfare Minister Rameswar Teli on July 9, 2026. The amendment specifically revises the conditions of employment and other service aspects for employees in shops and establishments.
Minister Teli articulated that the amendment seeks to reduce the compliance burden on commercial establishments and create a business-friendly regulatory environment. He further explained that the new Act intends to align provisions with emerging concepts such as digital governance, self-certification, deemed registration, and the promotion of “24×7” economic activities. Crucially, these modernisations are implemented while ensuring adequate safeguards relating to working conditions, employee welfare, safety, overtime, and weekly holidays, Minister Teli said.
Why it matters
The enactment of the Assam Shops And Establishment (Amendment) Act, 2026, holds significant implications for both employees and employers in Assam’s commercial sector. For employees, the Act introduces more favourable conditions, particularly concerning earned leave and overtime compensation. The revised provisions are expected to provide greater financial security and better work-life balance for those working in shops and establishments.
For businesses, the amendment signals a shift towards a more streamlined regulatory framework, with an emphasis on digital governance and reduced compliance complexities. This is intended to encourage economic activity and investment in the state, as highlighted by the Labour Welfare Minister. The Act’s applicability threshold has also been refined, with its provisions now applying to establishments employing ten or more employees, unless specific provisions are already covered by the Occupational Safety, Health and Working Conditions Code, 2020.
Background
The principal legislation governing shops and establishments in Assam has historically been the Assam Shops and Establishment Act, 1971. This original Act regulated various aspects of employment, including working hours, wages, leave entitlements, and employee protections, and it had repealed an earlier 1948 Act. Key features of the 1971 Act included mandatory registration of establishments, a cap on daily working hours at eight and weekly at forty-eight, and provisions for overtime pay at twice the ordinary rate.
Under the 1971 Act, employees were entitled to sixteen days of privilege leave with wages after twelve months of continuous service, which could be accumulated up to thirty days. The current amendment arrives amidst a broader national push for labour law reforms, with the central government consolidating 29 legacy labour statutes into four comprehensive labour codes. States like Assam are in the process of aligning their respective labour laws with these national reforms, aiming to simplify fragmented legislation and enhance ease of doing business while protecting worker safeguards.
A precursor to the 2026 Act, the Assam Shops and Establishments (Amendment) Act, 2025, had already introduced changes such as raising the applicability threshold from five or more workers to twenty or more workers for some sections, and strengthening gender equality provisions by allowing women to work night shifts (9 p.m. to 6 a.m.) with consent and mandatory safety measures. The 2026 Act builds upon these ongoing reforms.
Key details
The Assam Shops And Establishment (Amendment) Act, 2026, introduces several specific changes to employment conditions:
- Earned Leave: Under the new provisions, “Every employee who has worked for a period of ninety days or more in a shop or establishment in six months shall be allowed earned leave with wages for the number of days calculated at the rate of one day for every twenty days of work.” This marks a notable change from the previous entitlement of 16 days after twelve months of continuous service.
- Overtime Work: The Act mandates that wages shall be paid at twice the ordinary rate of wages for overtime work. The period of overtime work will be calculated on a daily or weekly basis, whichever is more favourable to the employee. A significant addition is the requirement that an employee shall be required to work overtime by the employer only subject to the consent of such employee for such work.
- Scope of Applicability: The provisions of the Act are now applicable to establishments having ten or more employees, provided that such provisions are not already included in the Occupational Safety, Health and Working Conditions Code, 2020.
- Terminology Change: The amendment systematically substitutes the term “worker” with “employee” throughout the principal Act, reflecting a modernised approach to labour terminology.
Reactions
Labour Welfare Minister Rameswar Teli, while introducing the Bill in the assembly, emphasised that the amendments strike a balance between easing the compliance burden on commercial establishments and ensuring robust safeguards for employee welfare, working conditions, safety, overtime, and weekly holidays. The government’s intent is to modernise the regulatory framework and align it with contemporary economic activities, including round-the-clock operations.
What’s next
The Assam Shops And Establishment (Amendment) Act, 2026, has come into force immediately upon its enactment. Employers and employees in shops and establishments across Assam are expected to adhere to the revised conditions of employment and service. The state government’s Labour Department will likely issue further guidelines or notifications to facilitate the smooth implementation of the new provisions, particularly regarding the specifics of digital governance, self-certification, and the enforcement of the new leave and overtime rules.