Does the POSH Act apply to companies with fewer than 10 employees?

Companies with fewer than 10 employees do not need to form an Internal Committee. Complaints from their employees are handled by the Local Committee set up by the district government. However, having a written POSH policy is considered good practice regardless of headcount.

What happens if a company does not comply with the POSH Act?

Non-compliance attracts a fine of up to INR 50,000 under the POSH Act itself. Companies registered under the Companies Act face additional exposure of up to INR 3 lakh if they fail to include POSH compliance disclosure in their Board Report.

How many members must the Internal Committee have?

The Internal Committee must have at least four members. At least half must be women. It must include a senior woman employee as Presiding Officer, at least two other employees, and one external member from an NGO or person familiar with POSH issues.

How often must the Internal Committee be reconstituted?

IC members serve a term of three years. The committee must be reconstituted before the term expires. A separate IC is required for each office or branch that has 10 or more employees.

POSH Act Compliance Guide

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The Prevention of Sexual Harassment (POSH) Act, 2013 mandates that organizations with 10 or more employees implement measures to prevent and address sexual harassment. For small businesses and startups (10–100 employees), compliance is essential for legal adherence and fostering an inclusive work culture.

Key Provisions of the POSH Act

Applicability & Scope: Applies across all sectors. Protects women in the workplace but can be extended to all genders.

Internal Committee (IC): Required for organizations with 10+ employees to handle complaints.

Composition: Minimum four members, ≥50% women, including a senior woman Presiding Officer, two employee members, and one external expert.
Tenure: 3-year term; renew or reconstitute every three years.
Locations: Separate IC per office/branch with 10+ employees.

Local Committee (LC): For organizations with fewer than 10 employees, complaints are referred to a government-appointed LC.

Employer Duties

POSH Policy & Awareness: Draft and disseminate a policy outlining definitions, complaint procedures, and consequences for misconduct.
Workshops & Training: Conduct regular sensitization programs for all employees and specialized training for IC members.
Safe Environment: Prevent harassment, provide interim relief during investigations, and ensure non-retaliation.
Assist Complaints: Support filing of police complaints and forward IPC-related cases.
Confidentiality: Maintain strict confidentiality, with penalties for breaches.
Disciplinary Action: Implement IC recommendations within 60 days of inquiry report.

Complaint & Inquiry Process

Complaints must be filed in writing within 3 months of the incident (extendable). IC completes inquiry in 90 days, delivers report in 10 days, and employer acts in 60 days.

Reporting & Record-Keeping

Annual IC Report

Submit a yearly report to the District Officer detailing complaints received, resolved, pending cases, and trainings conducted.

Board Report Disclosure

Include POSH compliance declaration and relevant data in the Board of Directors’ Report under the Companies Act.

Penalties

Fines up to INR 50,000 for non-compliance, plus potential Companies Act penalties (up to INR 3 lakh).

Best Practices for Compliance

Leadership Commitment: Publicly endorse policies to build a respectful culture.
Train IC Members: Provide training and authority for impartial handling.
Safe Reporting: Ensure confidentiality and protect against retaliation.
Regular Review: Update policies and practices to reflect legal changes and organizational learnings.