AS | Ankit Sarawagi|Founder, CFOmatrix·June 2026·11 min read | Updated Jun 2026 |
- A POSH policy is built on the POSH Act 2013; any workplace with 10 or more employees must constitute an Internal Committee (IC).
- The IC needs a senior woman as Presiding Officer, two employee members, one external member, and at least half the members must be women.
- Complaints are filed within 3 months; the inquiry must finish in 90 days; the IC reports in 10 days; the employer acts within 60 days.
- Every IC files an annual report to the District Officer, and the case count goes into the company’s annual board report.
- Non-compliance carries a fine up to Rs 50,000 (doubled on repeat) and is a standard due-diligence red flag.
| 10+ Employees at which an Internal Committee becomes mandatory | 90 days Maximum time the IC has to complete an inquiry into a complaint | Rs 50,000 Fine for non-compliance, doubled on a repeat offence |
What a POSH Policy Is and the Law Behind It
A POSH policy is your company’s written commitment to a workplace free of sexual harassment, plus the exact mechanism it uses to receive, inquire into and act on complaints. POSH stands for the Prevention of Sexual Harassment, and the policy is the operational face of a specific law.
That law is the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, usually called the POSH Act. It grew out of the Supreme Court’s 1997 Vishaka guidelines and made those protections statutory. The Act, read with its Rules, sets out who is covered, how the redressal committee is formed, the complaint and inquiry process, the timelines, and the employer’s duties.
The Act statutorily protects women at the workplace, and “woman” is read broadly: it covers permanent, temporary, contract and daily-wage staff, interns, probationers, and even visitors and clients. “Workplace” is equally broad and now clearly includes work-from-home and any place an employee visits during the course of employment. Many companies layer a gender-neutral internal policy on top so all employees are protected, while still running the statutory process for women that the Act requires.
A POSH policy is not optional paperwork. Investors, large customers and auditors routinely ask to see your policy, IC composition and annual report. A missing or stale POSH policy is one of the first things a due-diligence team flags.
Who Must Have a POSH Policy in India
The short answer: every employer in India should have a POSH policy, and any workplace with 10 or more employees must constitute an Internal Committee. The duty to provide a safe workplace applies to all employers regardless of headcount; the committee obligation switches on at 10.
- 10 or more employees: You must constitute an Internal Committee (IC) at each office or branch, adopt a written policy, display the consequences and the IC details, run awareness, and file the annual report.
- Fewer than 10 employees: You are not required to form an IC. Complaints (and any complaint against the employer themselves) are handled by the Local Committee constituted by the District Officer at the district level. You still owe a safe workplace and should adopt a policy and point staff to the Local Committee.
- Multiple locations: The 10-employee count and the IC requirement apply per administrative unit or office, so a company with several branches may need an IC at each one.
The headcount includes employees across all forms of engagement at that workplace, not just those on a permanent payroll. When in doubt, count broadly and constitute the IC.
The Internal Committee: Who Sits On It
The Internal Committee is the heart of POSH compliance. Get its composition wrong and every inquiry it runs is open to challenge. The POSH Act prescribes the membership precisely.
| Role | Who | Number |
|---|---|---|
| Presiding Officer | A senior-level woman employee | 1 |
| Employee members | Employees committed to women’s causes or with relevant experience | At least 2 |
| External member | From an NGO/association for women’s causes, or familiar with sexual harassment issues | 1 |
Two rules sit on top of this table. First, at least one half of the total members must be women. Second, members serve a term of up to three years. The presence of an external member is mandatory, not a nice-to-have: an inquiry conducted by an IC without a valid external member can be set aside.
The two most common composition mistakes are skipping the external member to save cost, and naming a male senior leader as Presiding Officer. Both invalidate the committee. A person convicted of an offence, or facing a pending inquiry, cannot serve on the IC.
The Complaint Procedure and 90-Day Timeline
The POSH process runs on a set of fixed clocks. Your policy should reproduce these so an employee never has to read the Act to understand their rights.
| Stage | Timeline |
|---|---|
| File a written complaint | Within 3 months of the incident (extendable by 3 more months for valid reasons) |
| Optional conciliation | Before inquiry, only at the complainant’s request; no monetary settlement basis |
| IC inquiry | Completed within 90 days |
| IC report to employer | Within 10 days of completing the inquiry |
| Employer acts on recommendations | Within 60 days; appeal possible within 90 days of recommendations |
The inquiry must follow the principles of natural justice: the respondent gets a copy of the complaint, both sides can present evidence and witnesses, and the IC has powers similar to a civil court for summoning and document production. The IC can recommend interim relief during the inquiry, such as transferring the complainant or respondent or granting leave of up to three months.
Confidentiality is mandatory throughout. The identity of the complainant, respondent and witnesses, and the contents of the proceedings, must not be published or disclosed; a breach itself carries a penalty. The Act also penalises false or malicious complaints, but only where malice is proven, not merely because a complaint could not be substantiated.
The Annual Report and Ongoing Employer Duties
POSH compliance is not a one-time policy adoption; it is a running set of duties. The two that are most often missed are the annual report and ongoing awareness.
Each calendar year the Internal Committee must prepare an annual report and submit it to the District Officer. The report covers the number of complaints received, the number disposed of, cases pending beyond 90 days, awareness or training programmes run during the year, and the nature of action taken. Separately, companies covered by the Companies Act must disclose the number of POSH cases in their annual board report.
The employer’s other standing duties under the Act include:
- Display the penal consequences of sexual harassment and the IC’s composition at a conspicuous place in the workplace.
- Organise regular awareness sessions for employees and orientation/skill-building for IC members.
- Provide assistance if the woman chooses to file a criminal complaint, and treat sexual harassment as misconduct under the service rules.
- Cause the inquiry to be conducted and provide the IC the facilities it needs to do its job.
- Monitor timely submission of reports by the IC.
Diarise the annual report deadline and at least one awareness session per year. The cheapest way to fail POSH is to constitute the IC once, then never train anyone or file a single report.
Penalties for POSH Non-Compliance
The statutory penalties look modest but the consequences are not. An employer who fails to constitute an Internal Committee, does not act on the IC’s recommendations, fails to file reports, or otherwise breaches the Act faces:
- A fine of up to Rs 50,000 for the first offence.
- Double the penalty for a repeat offence, plus possible cancellation of the business licence or registration and de-registration.
The bigger exposure is commercial and reputational. POSH compliance status, the IC composition and the annual report are standard items in investor and acquirer due diligence, in large-customer vendor onboarding, and in any HR audit. A gap here can delay a funding round or a sale, surface in employment litigation, and damage the employer brand. Treating POSH as a Rs 50,000 risk badly understates it.
The fine is small; the deal risk is not. A POSH gap rarely costs you Rs 50,000, but it can cost you a term sheet.
How to Implement a POSH Policy: Step by Step
If you are starting from zero, here is the order of operations to get from no policy to fully POSH compliant.
| Draft and adopt the policy |
Start from a compliant template (download ours below), tailor the names, locations and reporting lines, and get it approved by the board or management. Communicate it to every employee and add it to the onboarding pack.
| Constitute the Internal Committee |
At 10+ employees, appoint the Presiding Officer, two employee members and one external member, ensuring at least half are women. Issue a formal order naming the IC and its three-year term.
| Display, train and communicate |
Put up the penal consequences and IC details where staff can see them, run an awareness session for all employees, and give the IC members orientation on how to conduct a fair inquiry.
| Run the process and file the report |
Handle any complaint within the 3-month filing and 90-day inquiry windows, keep records confidential, act on IC recommendations within 60 days, and file the annual report with the District Officer each year.
“A POSH policy is judged not by the document on file, but by whether the committee, the timelines and the annual report actually run. Compliance is a habit, not a PDF.”
Ankit Sarawagi, CFOmatrixNeed more than POSH? You can see all 41 policy templates in our Policies & Templates library, from leave and maternity to data protection and information security.
Frequently Asked Questions
Is a POSH policy mandatory in India?
Yes. The POSH Act 2013 requires every employer to provide a safe workplace and to constitute an Internal Committee at any workplace with 10 or more employees. A written POSH policy is the standard and expected way to document the prohibition, the redressal mechanism and the consequences, and is effectively mandatory for compliance.
How many employees trigger the POSH Act?
An employer must constitute an Internal Committee (IC) once the workplace has 10 or more employees. Workplaces with fewer than 10 employees, or complaints against the employer, are covered through a Local Committee constituted by the District Officer at the district level.
Who must be on the Internal Committee under POSH?
The IC must have a Presiding Officer who is a senior woman employee, at least two members from among employees committed to the cause of women or with relevant experience, and one external member from an NGO or someone familiar with sexual harassment issues. At least one half of the total members must be women.
What is the 90-day timeline in the POSH Act?
The Internal Committee must complete its inquiry into a complaint within 90 days. A written complaint should be filed within three months of the incident (extendable by another three months for valid reasons). The IC submits its report within 10 days of completing the inquiry, and the employer must act on the recommendations within 60 days.
What is the POSH annual report?
Every Internal Committee must prepare an annual report each calendar year covering complaints received, complaints disposed of, cases pending beyond 90 days, awareness programmes conducted and the nature of action taken. It is submitted to the District Officer, and companies must also state the number of POSH cases in their annual board report under the Companies Act.
What are the penalties for POSH non-compliance?
An employer who fails to constitute an Internal Committee, does not act on IC recommendations or breaches the Act can be fined up to Rs 50,000. A repeat offence can lead to double the penalty, cancellation of the business licence or registration, and de-registration. POSH non-compliance is also a red flag in due diligence and can stall fundraising or acquisitions.
Does the POSH Act cover men or only women?
The POSH Act 2013 statutorily protects women (including interns, contract staff, visitors and clients) at the workplace. Many companies voluntarily adopt a gender-neutral internal policy that protects all employees, while still running the statutory Internal Committee process for complaints by women as the Act requires.
This article is general information as of 2026 and is not legal advice. POSH requirements and procedural details can change and vary by state and circumstance. Verify the current law and consult a qualified adviser before adopting or relying on any policy.
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AS | Founder, CFOmatrix | Finance Strategy & Equity Compliance CFOmatrix is a knowledge platform focused on how finance actually works inside growing companies. Every insight is shaped by real operating experience across startups and growth-stage companies, including cross-border setups. |