Starting a New Hotel: Can We Operate with Trainees Before Legal Registration?

Starting a New Hotel Under the Shops & Establishments Act

If we start a new establishment (Hotel) under the Shops & Establishments Act and PF and ESIC codes are not available, can we initially begin work with a one-year Hotel operation trainee on a monthly stipend as per the state MWA (Basic + VDA) before completing the legal formalities (PF, ESIC, and registration under the Shops & Establishments Act)? Is it mandatory to register the establishment under the Shops & Establishments Act?

Systematic Procedure and Legal Formalities

Please suggest the systematic procedure to start work with employees and Hotel trainees on Hotel premises, and what mandatory legal formalities should be followed by the HR department.

Please suggest and advise.

Regards,
Vishal

You cannot start a new establishment without registering it or going through any legal formalities. Firstly, any establishment should comply with the Shops Act. Then, you have to obtain approvals from the Labour Department to acquire licenses from the authorities. Within the period specified in sub-section (5), the owner/occupier of the establishment shall submit a form filled with details to the Labour Inspector along with the applicable fees.

The details should include the name of the establishment, postal address of the establishment, the category of the establishment (whether it is a shop, theatre, amusement park, commercial, hotel, restaurant, etc.), and the number of employees working there. Upon submission of these details, a certificate will be issued by the Labour In-charge after the details have been verified by the government bodies as per the provisions of the act.

After receiving the registration certificate, the establishment will come into operation within 3 months from the date of commencement. For further specific information, please refer to the link below:

[Office Of The Labour Commissioner](http://www.delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/Acts+Implemented/Details+of+the+Acts+Implemented/The+Delhi+Shops+Act,+1954/)

All laws, rules, and regulations are implemented from day one. "Day one" means when your establishment is ready to start functioning (even on a trial basis). Liabilities on account of ESI/PF are huge. Beware of them and do not avoid. ESI/PF is a symptom of prosperity and stability of the company as well.

Regards