Hi Sir,

We have a corporate office in Bangalore, Karnataka, and 21 branch offices PAN India across 15 different states. Currently, we are implementing the Karnataka state leave policy in all branches. Could you please advise us on whether we need to adhere to the respective state Shops & Establishment Act? Or can we explain to internal auditors that we are following the Karnataka state leave policy due to our base location and corporate office being in Karnataka, in accordance with the S&E Act?

Are there any compliance issues if we have adopted the Karnataka state leave policy for all states? One of the challenges we are facing is managing leave credits and debits for employees across 15 states in PAN India annually, which is not feasible to do regularly. We seek your valuable input on how to justify this situation.

Thank you.

From India, Bengaluru
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Dear Mr. Raju Gowda,

Your 21 branch offices in PAN India are registered under the respective State Shops & Commercial Establishments Act. Consequently, employees are eligible for leaves as provided therein. The Karnataka Shops & Commercial Establishments Act, 1961 has jurisdictional limitations, i.e., Karnataka.

Please do not look at your convenience. You have to maintain records state-wise. If the leaves provided under the Karnataka Shops Act are more than leaves in other states, you can continue to provide them.

From India, New Delhi
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Branch offices in respective states are supposed to function as per the Shops and Commercial Establishment Act and Rules of such states. This will lead to 15 different sets of leave rules and holiday lists. I recommend beginning planning now to get it done so that you can avoid non-compliance issues at a later stage. Enforcing such a comprehensive policy and then tracking leave and holidays also requires tremendous effort. Try reliable and scalable solutions like greytHR for automation purposes. I have seen month-end rush and stress of HR and Payroll managers in many firms with employees PAN India.
From India, Bangalore
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Dear Raju-Gowda,

In continuation of the views of our learned friends with which I am in complete agreement, I would like to add as follows:

For any disputes relating to service conditions like leave, wages/salary, and allowances; termination of employment of employees; the actual place of work determines jurisdiction notwithstanding the place from where they are administratively controlled in matters like appointment, transfer, etc.

Therefore, when an organization has pan India presence and operations, inter-State transfer of employees on exigencies of work cannot be ruled out. Even if you rule out that possibility and maintain only intra-State norms in respect of transfers, promotions, etc., you have to abide by the provisions of the Act and Rules applicable to that State only. Thus, it becomes imperative that every organization which has branches in more than one State has to strictly maintain only uniform conditions of employment like leave, wages to avoid disparity and compliance with all such States' laws as well.

Particularly, when such a pan-India establishment falls under different State S&E Acts, you have to compare the leave provisions of various State Acts and strike a balance by adopting the highest scale of leave possible. It will ensure uniform leave benefits to the employees irrespective of their place of postings and ease compliance for the management as well.

From India, Salem
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Dear colleague,

I concur with the views expressed here that in matters of leave compliance, each State Shops Act will have to be followed. In the case of Pan India presence, you may consider a uniform leave policy for all states if the leave quantum is equal to or better than the highest in any State. This, though, may result in giving more than some State Shops Act; it will preempt administrative hassles in terms of record-keeping of leaves and in inter-state transfers of the staff. If you don't favor this, your option is to follow each State's leave provisions.

Regards, Vinayak Nagarkar HR and Employee Relations Consultant

From India, Mumbai
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Dear Friends,

I am hereby attaching a leave applicability sheet as per the different Shop & Establishment Act. If companies have offices in more than one state registered under the S&E Act, the same sheet can be used for calculating leaves.

From India, Pune
Attached Files (Download Requires Membership)
File Type: pdf STATE WISE S&E LEAVES.pdf (4.6 KB, 172 views)

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Anonymous
Kindly friends,

Herewith attaching a leave application form in accordance with various Shop & Establishment Acts. Companies with offices in many states that are registered under the S&E Act may utilize the same method for calculating leaves.

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From United States, New York
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From United States, New York
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