Labour License in Karnataka (2026): Shops & Establishments Registration, Contract Labour Licences and the 2026 Changes

Ask anyone in Bengaluru, Mysuru or Hubballi what you need to open a shop or office and "labour licence" will be on the list — usually without anyone explaining which licence, from whom, or that the rules changed in September 2026. This guide is for shop owners, startups, restaurants, agencies and contractors in Karnataka. It covers the Shops and Commercial Establishments registration most businesses need, the contract-labour registrations for businesses that use contractors, the fees in the state gazette, the September 2026 amendment that ended renewals and raised penalties, and where the move to the national Labour Codes stands. Every fee and rule was checked against Karnataka government sources in October 2026.

Quick answer

For most businesses, a Karnataka "labour licence" means registration under the Karnataka Shops and Commercial Establishments Act, 1961, done online on e-Karmika. The fee runs from ₹405 (no employees) and ₹810 (1–9) upward. Since 4 September 2026, registration is valid until the establishment closes or ceases business — no more renewals.

• Using contract workers? Principal-employer registration and contractor licences are on labouronline.karnataka.gov.in

• Contractor licence fee from ₹1,013 plus ₹68 per worker security deposit

• Falsely claiming deemed registration can cost up to ₹50,000 since September 2026

• Karnataka's OSH Code rules were still in draft (published 23 January 2026)

What "labour licence" means in Karnataka

Karnataka's Labour department enforces a long list of state and central labour laws, and several of them require a business to register. The one almost every business needs is registration under the Karnataka Shops and Commercial Establishments Act, 1961. It covers shops, offices, restaurants, hotels, theatres, IT firms, agencies and other commercial establishments, and governs opening hours, weekly holidays, leave, overtime, wage payment and the records you must keep. Registration is how the department knows you exist.

Two other registrations matter if you use contract workers. Under the Contract Labour (Regulation and Abolition) Act, 1970 and Karnataka's 1974 rules, the business that uses contract labour — the principal employer — registers its establishment, and each contractor who supplies the workers holds a licence. Construction employers register under the Building and Other Construction Workers Act, and employers of migrant workers from other states under the Inter-State Migrant Workmen Act. Factories are licensed separately by the Department of Factories, Boilers, Industrial Safety and Health on its esuraksha portal; see our factory licence guide.

A labour licence is not a trade licence. The trade licence comes from the city corporation or municipal body; it regulates the use of premises for a trade. You will usually need both.

Karnataka labour registrations at a glance (2026)

₹810

Shops Act fee, 1–9 employees

one-time

Until closure

Shops Act validity

from 4 Sep 2026

₹1,013

Contractor licence, up to 20 workers

10 days

Sakala limit for CLRA licence

Shops and Establishments registration

Every shop or commercial establishment covered by the Act must register, whether or not it has employees. The registering officer is the Labour Inspector or Senior Labour Inspector for your area, and the whole process runs on e-Karmika, the department's portal for the Shops Act. From the same login you can apply for registration, amend the certificate, download a duplicate, file annual returns, apply for exemptions from the weekly holiday, and close the registration.

The September 2026 amendment

The Karnataka Shops and Commercial Establishments (Amendment) Act, 2026 — Karnataka Act 38 of 2026 — received the Governor's assent on 3 September and came into force on publication in the gazette on 4 September 2026. It changes several things employers should know:

• No more renewals. A registration is now valid until the establishment closes or ceases business. The old provision requiring periodic renewal has gone.
• Digital by law. Applications, fees, certificates and change notifications are to be made through electronic or digital mode.
• Exemption for OSH-registered establishments. An establishment employing ten or more workers that is already registered under the Occupational Safety, Health and Working Conditions Code, 2020 doesn't need a separate Shops Act registration, and godowns within 100 metres of the main establishment don't need their own.
• New employee protections. Employers must issue a service certificate within seven days of an employee's request, and may not keep employees' original educational or experience certificates.
• Women on night shifts. The detailed conditions previously attached to women working night shifts have been removed from section 25.
• Higher penalties, with compounding. Failing to register is now a fine of up to ₹3,000 (₹5,000 for a repeat), and falsely claiming deemed registration carries up to up to ₹50,000, replacing the old prison terms. Other fines rose too. Offences can be compounded by paying 50% of the prescribed fine (first offence); 75% (repeat) of the prescribed fine, with an appeal within 30 days to an officer not below Assistant Labour Commissioner.

The amendment also updates cross-references to the Code on Wages and the Code on Social Security.

Registration fees

The fee is a one-time amount set by headcount in Schedule-I of the Karnataka Shops and Commercial Establishments Rules, 1963. The current table was substituted by the 2024 amendment rules published in the Karnataka Gazette of 1 January 2025, and e-Karmika shows the same figures.

Many websites still show the older amounts — ₹300 for no employees and ₹600 for one to nine — from the department's 2021 checklist. Those were replaced in January 2025. Fees are paid online through Khajane-II, the state treasury gateway; e-Karmika doesn't accept cash or demand drafts.

Documents and steps

Documents for Shops and Establishments registration on e-Karmika

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• Identity and address proof of the owner — Aadhaar, driving licence or voter ID
• Address proof of the establishment — rent or lease agreement, GST certificate, or property tax / khata receipt
• Certificate of incorporation and memorandum/articles, for a private limited company
• Authorisation letter for the authorised signatory, or self-attestation letter from the owner
• Fee payment challan or transaction receipt
• Form A, filled in and signed by the owner or authorised signatory

Share Print

Registering a shop or office on e-Karmika

1. 1

   Create a login on e-Karmika

   Register as a user; the same username and password are used later for amendments, annual returns and closure.

   e-Karmika portal
2. 2

   Fill in Form A online

   Enter establishment details, category, date of commencement, employer details and the number of employees by gender.

3. 3

   Upload documents

   Upload the scanned documents listed on the portal; keep each file small and legible.

4. 4

   Pay the fee through Khajane-II

   The portal calculates the fee from your headcount; pay online and download the acknowledgement.

5. 5

   Download the certificate

   The Labour Inspector scrutinises the application and issues a digital certificate, or records reasons for rejection online.

The department's checklist sets a maximum of one day for the service once the application is complete; the Sakala list — Karnataka's public-service guarantee — allows 7 days. Display the certificate at the establishment.

Contract labour: principal employer registration and contractor licences

If your business uses workers supplied by a contractor — security guards, housekeeping, loading staff, construction crews, canteen workers — the contract-labour rules apply. Under Karnataka's checklist for the CLRA Act, a principal employer's establishment registers through the department's online services portal, and a contractor who engages the threshold number of workers needs a licence. The registering and licensing officer is the Assistant Labour Commissioner, and the Sakala time limit is 10 days for both registration and a new licence.

The fees were last revised by the CLRA (Karnataka) (Amendment) Rules, 2024, in the same 1 January 2025 gazette, and are listed on labouronline.karnataka.gov.in.

Contract labour fees in Karnataka (gazette, 1 January 2025)

Workers	Principal employer registration	Contractor licence
Up to 20	₹1,688	₹1,013
21–50	₹2,700	₹2,025
51–100	₹4,388	₹3,038
101–200	₹5,400	₹4,050
201–400	₹8,100	₹6,750
401–500	₹10,125	₹9,450
Above 500	₹13,500	₹13,500
Security deposit	—	₹68 per worker

Up to 20

Principal employer registration

₹1,688

Contractor licence

₹1,013

21–50

Principal employer registration

₹2,700

Contractor licence

₹2,025

51–100

Principal employer registration

₹4,388

Contractor licence

₹3,038

101–200

Principal employer registration

₹5,400

Contractor licence

₹4,050

201–400

Principal employer registration

₹8,100

Contractor licence

₹6,750

401–500

Principal employer registration

₹10,125

Contractor licence

₹9,450

Above 500

Principal employer registration

₹13,500

Contractor licence

₹13,500

Security deposit

Principal employer registration

—

Contractor licence

₹68 per worker

The documents are the same for both: the applicant's identity card, a certified copy of the agreement between principal employer and contractor, PF, ESI, Shops Act or factory registration, a list of partners or directors with ID, the authorised signatory's details and authorisation, a declaration that no child labour is employed, and the company's memorandum or ROC record where relevant. Amendments cost ₹200. Under the department's checklist, renewal of a contractor licence is auto-approved once applied for and paid.

Exemptions, inspections and penalties

Some establishments can ask for relief from particular rules rather than from registration itself. e-Karmika handles applications for exemption from the weekly-holiday requirement — useful for businesses that trade seven days a week and stagger staff days off — and permission for women to work night shifts — the detailed night-shift conditions were removed in September 2026, so check whether the portal still asks for an application. Apply before you change rosters, and keep the approval on file with your registers. An exemption granted to one establishment doesn't carry over to a new branch; each location applies for itself.

Inspections are carried out by the Labour Inspectors and Senior Labour Inspectors who also register establishments. They can ask to see your registration certificate, attendance and wage registers, leave records and any exemption orders, and they will compare headcount on the floor with the slab you registered under. Under the September 2026 amendment, most offences can be compounded on the spot by paying a share of the prescribed fine, but the same offence can't be compounded more than twice in a year, and no penalty can be imposed without giving you a hearing. If you disagree with an order, the appeal must be filed within 30 days and the fine deposited first.

In practice, the cheapest compliance strategy is boring: register before you open, keep the slab current, maintain the registers monthly rather than reconstructing them before an inspection, and keep copies of every contractor's licence and agreement. Businesses that do this rarely see more than a routine inspection.

From opening to closure under the Shops Act

Step 1

Register on e-Karmika

Step 2

Certificate

valid until closure

Step 3

Notify changes online

Step 4

Annual returns and registers

Step 5

Close registration

when you stop trading

Where the Labour Codes stand in Karnataka

The four national Labour Codes came into force on 21 November 2025. The OSH Code absorbs the CLRA Act and changes the thresholds: contract-labour rules apply where 50 or more contract workers are engaged, against 20 under the old Act, and establishments with 10 or more workers must register under the Code. But each state must make its own rules for the establishments it regulates, and Karnataka hadn't finalised them. The Labour Commissionerate published the latest draft OSH (Karnataka) Rules, 2026 on 23 January 2026, with 45 days for objections; we found no final notification as of October 2026. Until the final rules appear, the department's portals continue to process registrations and licences under the existing Acts.

The draft gives a preview of what's coming. Establishments with ten or more workers would register online with fees of ₹5,000 for 10–19 employees and ₹10,000 for 20–50, rising to ₹1,25,000 above 1,000. Contractor licences would start at ₹2,000 for 50–100 contract workers, with a much larger security deposit of ₹1,000 per worker, and renewal applications would be due at least 30 days and no more than 90 days before expiry. These are draft figures and may change.

The September 2026 Shops Act amendment already anticipates the switch: once you are registered under the OSH Code with ten or more workers, you won't need a separate Shops Act registration. Small establishments with fewer than ten workers will stay under the Shops Act.

Key dates for Karnataka labour registrations

1 January 2025

Revised Shops Act and CLRA fees published in the Karnataka Gazette

21 November 2025

Four national Labour Codes in force

23 January 2026

Latest draft OSH (Karnataka) Rules published for objections

4 September 2026

Shops Act amendment: no renewals, OSH exemption, higher fines

Pending

Final Karnataka rules under the OSH Code

Worked examples

A Bengaluru café with 12 staff. The café registers under the Shops Act on e-Karmika in the 10–19 slab and pays ₹5,400 once. Under the September 2026 amendment, that registration stays valid until the café closes, so there's no renewal to diary. When headcount reaches 20, the owner files an amendment online and the 20–49 slab applies to future changes. With 12 staff, the café also crosses the ten-worker mark in the OSH Code, so once Karnataka's OSH rules are final it can register under the Code instead — which, under the amendment, exempts it from the Shops Act. Until then, the Shops Act registration is the one to hold.

A housekeeping contractor at a tech park. A contractor deploys 40 workers at a Whitefield office campus. Under the rules the portal still applies, the campus owner registers as principal employer in the 21–50 slab for ₹2,700, and the contractor takes a licence for ₹2,025 plus a security deposit of 40 × ₹68 = ₹2,720. Under the OSH Code's 50-worker threshold, a 40-worker deployment may fall outside the licensing requirement once Karnataka's rules take effect, but until then both parties should follow what the Assistant Labour Commissioner applies. If the deployment grows to 60 workers under the draft OSH rules, the licence fee would be ₹2,000 but the deposit would jump to 60 × ₹1,000 = ₹60,000 — budget for it.

After you register: ongoing obligations

Registration is the start, not the end. Under the Shops Act you must notify the Inspector of changes — new address, change of employer or manager, change in category or headcount — and since September 2026 these notifications go through the portal. Annual returns are filed on e-Karmika. Keep attendance, wage and leave registers, display the certificate and the weekly holiday, and issue service certificates within seven days of a request.

Pay at least the notified rates in our Karnataka minimum wages guide — in Zone 1, an unskilled worker's monthly minimum is ₹23,376.43. Deduct and pay professional tax of ₹200 a month for employees earning ₹25,000 or more. Once you cross the thresholds, register for ESIC and EPF. Generate compliant payslips with our salary slip generator.

When you close, use e-Karmika to report closure. Because a registration now lasts until the business ceases, an unclosed registration can follow you; close it properly.

Common mistakes and how to fix them

Waiting for a renewal notice. Under the 2026 amendment there is no renewal, but there is still a duty to notify changes. If your headcount has grown into a new slab, file the amendment.

Paying old fees. If an agent quotes ₹600 for a shop with a few employees, they are using the pre-2025 table. The portal calculates the correct amount; pay only through Khajane-II.

Mixing up the trade licence and the labour registration. The city corporation's trade licence doesn't cover your Labour department obligations, and the Shops Act certificate doesn't let you trade from the premises. Get both.

Ignoring contractors. If your security or housekeeping agency doesn't hold a licence where one is required, the principal employer can be liable for unpaid wages and benefits of the contract workers. Ask for the contractor's licence and keep a copy.

Assuming the OSH Code thresholds already apply. The Code is in force nationally, but Karnataka's rules are still in draft. Follow what the department's portals and officers currently apply, and watch for the final notification.

Official links

• e-Karmika — Shops and EstablishmentsRegister, amend, annual returns, closure
• Labour Department Online ServicesCLRA, BOCW, inter-state migrant workers
• Fee notifications (Gazette, 1 Jan 2025)Shops Act, CLRA and other fee tables
• Labour Commissionerate — new labour rulesDraft Karnataka rules under the Codes
• Labour Commissionerate — Sakala servicesService time limits
• esuraksha — factoriesFactory licences

What to do next

Register your establishment on e-Karmika before you open, check whether any of your workers come through a contractor, and diary a check for Karnataka's final OSH Code rules. Then set up payroll so wages, professional tax and statutory deductions are right from the first month — our Karnataka minimum wages guide and salary slip generator are good next steps. If you also operate in Telangana, compare with our Telangana labour licence guide.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is a labour licence in Karnataka?

It is the everyday name for registrations issued by Karnataka's Labour department. For most businesses it means registration under the Karnataka Shops and Commercial Establishments Act, 1961, done online on e-Karmika. Businesses that use contract workers also need principal-employer registration, and their contractors need a contract labour licence, both on the department's online services portal.

What is the fee for Shops and Establishments registration in Karnataka?

The fee depends on headcount. Under the rules amended in the Karnataka Gazette of 1 January 2025, it is ₹405 with no employees, ₹810 for 1–9 employees, ₹5,400 for 10–19, ₹13,500 for 20–49 and ₹27,000 for 50–99. The same figures appear on the e-Karmika portal. Pay online through Khajane-II.

Do I need to renew my Shops and Establishments registration in Karnataka?

Not any more. The Karnataka Shops and Commercial Establishments (Amendment) Act, 2026, in force from 4 September 2026, makes a registration valid until the establishment closes or ceases business. You must still notify changes such as a new address, owner or headcount online, and close the registration when you stop trading.

Is a trade licence the same as a labour licence in Karnataka?

No. A trade licence is issued by the city corporation or municipality and regulates the use of premises for a trade. The labour licence, or Shops and Establishments registration, comes from the Labour department and governs working hours, holidays, wages and employee records. Most shops and offices need both.

When is a contract labour licence required in Karnataka?

Under the old CLRA Act, a contractor needed a licence when engaging 20 or more contract workers, and Karnataka's portal still issues licences under those rules. The OSH Code, in force since 21 November 2025, raises the threshold to 50 or more contract workers, but Karnataka's own OSH rules were still in draft in October 2026. Check with the Assistant Labour Commissioner before deploying workers.

What happens if I don't register my shop in Karnataka?

Since the 2026 amendment, failing to register under the Shops and Commercial Establishments Act can attract a fine of up to ₹3,000 (₹5,000 for a repeat offence), and falsely claiming deemed registration can cost up to ₹50,000. Most offences can be compounded by paying 50% of the prescribed fine (first offence); 75% (repeat) of the prescribed fine, and an appeal lies to an officer not below Assistant Labour Commissioner. Registering late is far cheaper than a penalty.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Karnataka Shops and Commercial Establishments (Amendment) Act, 2026 — Karnataka Gazette Extraordinary, 4 September 2026 (Act 38 of 2026) — Department of Parliamentary Affairs and Legislation, Government of Karnataka (gazette copy hosted by Simpliance) · accessed 9 October 2026
2. 2.Karnataka Gazette, 1 January 2025 — fee amendments to Labour Acts (S&CE Rules Schedule-I, CLRA rule 26, ISMW) — Labour Department, Government of Karnataka · accessed 9 October 2026
3. 3.e-Karmika — Registration under the Karnataka Shops and Commercial Establishments Act — Labour Department, Government of Karnataka · accessed 9 October 2026
4. 4.Labour Department Online Services — fee details of CLRA, BOCW and ISMWA — Labour Department, Government of Karnataka · accessed 9 October 2026
5. 5.Labour Department — Shops and Establishments online services procedure and checklist — Labour Department, Government of Karnataka · accessed 9 October 2026
6. 6.Labour Department — Contract Labour Act services checklist — Labour Department, Government of Karnataka · accessed 9 October 2026
7. 7.Karnataka Labour Commissionerate — Sakala services — Labour Commissioner Office, Government of Karnataka · accessed 9 October 2026
8. 8.Draft Occupational Safety, Health and Working Conditions (Karnataka) Rules, 2026 — Karnataka Gazette, 23 January 2026 — Labour Department, Government of Karnataka · accessed 9 October 2026
9. 9.Karnataka Labour Commissionerate — New labour rules and bills — Labour Commissioner Office, Government of Karnataka · accessed 9 October 2026
10. 10.AZB & Partners — Karnataka Shops and Commercial Establishments (Amendment) Act, 2026 — AZB & Partners · accessed 9 October 2026