In a move aimed at supporting India’s micro and small enterprise sector, the Ministry of Labour and Employment has initiated a review of labour law compliance requirements for small partnership firms, particularly those employing fewer than 10 workers. The objective is to reduce regulatory burdens while ensuring essential worker protections remain intact.

Sources in the ministry confirmed that a committee of legal and policy experts is currently evaluating which provisions of key labour laws, such as the Shops and Establishments Act, Minimum Wages Act, and Employees’ Provident Funds and Miscellaneous Provisions Act, can be rationalized or simplified for partnership-based micro-enterprises.

Many small partnership firms, especially those in sectors like retail, food services, repair, and consulting, have long expressed concern that labour compliance requirements are disproportionate to their size and operational capacity. Industry associations have argued that filing monthly returns, maintaining detailed employee registers, and managing digital labour audits often require costly external consultants, diverting resources from core business activities.

“Small partnership firms often operate on thin margins and informal hiring models. Simplified labour compliance would encourage more of them to register formally and treat their workers with greater consistency,” said Nikhil Verma, an employment law expert advising the review committee.

Proposals under consideration include self-certification schemes, quarterly instead of monthly compliance submissions, and digital recordkeeping templates specifically designed for small firms. Additionally, the government may extend benefits of the Ease of Compliance to Maintain Registers under Various Labour Laws Rules, 2017 to registered partnership firms.

Labour rights groups have supported the initiative in principle but cautioned that any easing of compliance must not lead to erosion of minimum wages, health and safety standards, or social security eligibility for workers.

The ministry is expected to release a draft framework for public consultation in the coming months, potentially paving the way for a more balanced regulatory environment for India’s growing community of small partnership businesses.