1. Registration: Does Every Establishment Need to Follow the Same Process?

The amendment addresses overlapping registration requirements for certain establishments.

Qualifying establishments employing ten or more workers and registered under the OSH Code are exempt from obtaining a separate registration under the Karnataka Shops and Commercial Establishments Act, subject to the statutory conditions.

The reported exemption also extends to certain godowns and storage facilities situated within 100 metres of the principal establishment. Employers must verify whether their particular facility falls within the relevant provision. knowledge.dlapiper.com

Before changing their registration practices, organisations should establish:

• The legal identity of the establishment.
• The location and nature of its operations.
• The number of workers employed.
• Whether OSH Code registration applies.
• Whether the establishment has completed the relevant registration.
• Whether any additional state-specific requirement remains applicable.

For example, a Bengaluru-based technology company and a manufacturing unit in an industrial area may have different compliance requirements depending on their establishment type, workforce and applicable legal framework.

The exemption should be assessed against the actual facts rather than applied simply because the organisation has ten or more employees.

2. Employee Service Certificates: A Process HR Must Review

The amendment introduces a requirement to issue a service certificate within seven days of receiving an application from an employee following the end of employment. knowledge.dlapiper.com

This is an important operational consideration for HR departments.

Many organisations issue experience letters or relieving letters through an internal approval process involving HR, the reporting manager, finance and IT.

Such workflows can become unnecessarily lengthy if responsibilities and approval timelines are not clearly defined.

HR should review whether the organisation's existing process can accommodate the applicable seven-day requirement.

A practical service-certificate workflow should cover:

Step 1: Receive the request.

Record the employee's name, employee ID, date of application and contact details.

Step 2: Verify employment information.

Confirm the employee's designation, employment period and other details that must appear on the certificate.

Step 3: Validate outstanding processes.

Check the separation record and relevant employment data. Do not introduce unnecessary approval delays where the law requires the certificate within the prescribed period.

Step 4: Generate the certificate.

Use an approved template containing accurate employment information.

Step 5: Issue and retain evidence.

Record the date of issue and preserve evidence of delivery.

A standard template and an automated reminder can help HR teams manage this requirement consistently.

3. Can Employers Retain Employees' Original Certificates?

The amendment prohibits employers from retaining employees' original educational certificates, experience certificates or other original documents at appointment or during employment. knowledge.dlapiper.com

This requires employers to review recruitment and onboarding practices.

Some organisations collect original certificates for verification or retain documents temporarily during onboarding.

Employers should distinguish between verifying an original document and keeping possession of it.

A safer process is to:

• Inspect the original document when required.
• Verify its authenticity.
• Retain an appropriate copy or digital record where legally permissible.
• Record that verification has been completed.
• Return the original document promptly.
• Avoid making the continued retention of originals a condition of employment.

For digital records, organisations should establish appropriate access controls, retention periods and safeguards for personal information.

Practical recommendation: Review onboarding checklists, recruiter instructions, document-verification procedures and any declarations requiring employees to deposit original certificates.

4. Women Working Night Shifts: Review Applicable Safeguards

The amendment also changes certain provisions relating to women working night shifts.

Some safeguards previously associated specifically with the Karnataka Shops and Commercial Establishments Act have been removed or altered, while relevant protections remain. The interaction between the amended state law and the OSH Code framework must be assessed before changing workplace procedures. knowledge.dlapiper.com

Employers should not interpret these changes as permission to discontinue all night-shift safety measures.

Organisations employing women during night shifts should review:

• Applicable consent and employment conditions.
• Transport arrangements where required.
• Workplace security.
• Emergency response procedures.
• Complaint-handling mechanisms.
• Applicable OSH Code and state requirements.
• Records supporting compliance.

The appropriate safeguards depend on the applicable law, establishment and circumstances.

HR should obtain a documented compliance review before changing existing night-shift policies.

5. Penalties and Enforcement: Why Documentation Still Matters

The amendment revises enforcement provisions, including replacing imprisonment with monetary penalties for certain offences, changing compounding arrangements and introducing a statutory right of appeal in the relevant context. knowledge.dlapiper.com

This does not mean that non-compliance is inconsequential.

Financial penalties, administrative action, employee disputes and reputational consequences can still affect the organisation.

Employers should ensure that required registrations, employment records and certificates are maintained correctly.

Where a provision is unclear, the organisation should obtain professional advice and document its interpretation and corrective measures.

6. What Karnataka Employers Should Do Now

A practical compliance review should include the following actions.

Registration review

• Prepare a list of all establishments and operating locations.
• Verify applicable registration requirements.
• Assess whether the OSH Code registration exemption applies.
• Retain relevant registration documents and supporting evidence.

HR documentation review

• Review onboarding and document-verification procedures.
• Stop retaining original employee certificates where prohibited.
• Establish a controlled process for employee document copies.

Separation process review

• Introduce a service-certificate request register.
• Assign responsibility for verification and issue.
• Configure reminders for the applicable seven-day timeline.
• Maintain evidence of completion.

Workplace policy review

• Reassess night-shift procedures.
• Review employee grievance mechanisms.
• Verify applicable state and central obligations.

Internal audit

• Check a sample of employee files.
• Verify that required records are available.
• Record gaps and assign corrective-action owners.

7. How HRMS Can Help

An HRMS can support compliance by maintaining employee documents, managing onboarding workflows, recording separation dates and tracking service-certificate requests.

Useful features include:

• Digital employee document storage.
• Role-based document access.
• Onboarding checklists.
• Separation workflows.
• Service-certificate generation.
• Request tracking and reminders.
• Document issue records.
• Compliance dashboards.

The system should be configured to reflect the applicable statutory requirements. An automated workflow is only as reliable as the rules and data on which it operates.

Conclusion

The Karnataka Shops and Commercial Establishments Amendment Act, 2026, makes it important for employers to reassess registration requirements, employee-document practices and separation procedures.

Businesses should not assume that an exemption from one registration automatically removes other statutory responsibilities.

A focused review of registrations, service certificates, original-document handling and workplace procedures will help Karnataka employers respond to the amendment in a structured manner.

Disclaimer: This article is for general information. Employers should verify the official Gazette text, applicable rules and establishment-specific conditions before relying on an exemption or changing an employment policy.