POSH compliance for small businesses: Internal Committee, annual report and training
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, known as the POSH Act, is one of the most important laws for any employer in India, and one of the most often neglected by small businesses. Many founders assume it applies only to large companies. It does not.
The POSH Act was not merged into the new labour codes. It continues as a separate law, and its requirements apply in full.
When the POSH Act applies
Every employer with 10 or more employees must constitute an Internal Committee. Employees include full-time, part-time, temporary and contract staff, trainees and interns. Workplaces with fewer than 10 employees are covered too, but complaints from them go to the Local Committee set up by the district.
Setting up the Internal Committee
Composition
- A Presiding Officer, who must be a senior woman employee
- At least two members from among employees, preferably committed to the cause of women or with legal or social work experience
- One external member from an NGO or association committed to women's causes, or a person familiar with issues of sexual harassment
- At least half of all members must be women
Tenure and formalities
Members can serve for up to three years. Constitute the committee by a written order, display the names and contact details of members at the workplace, and reconstitute it promptly when a member leaves.
Your obligations as an employer
- Adopt a written POSH policy and share it with every employee
- Display the consequences of sexual harassment and the Internal Committee's details at the workplace
- Run regular awareness sessions for employees and specific training for committee members
- Provide the committee with the facilities it needs to conduct inquiries
- Act on the committee's recommendations
- Keep the identity of the parties and the proceedings confidential
How a complaint is handled
- A complaint is made in writing, normally within three months of the incident, which the committee can extend by a further three months for valid reasons
- At the complainant's request the committee may attempt conciliation. Monetary settlement cannot be the basis of conciliation
- If there is no conciliation, the committee conducts an inquiry following the principles of natural justice
- The inquiry must be completed within 90 days
- The committee's report goes to the employer within 10 days of completing the inquiry
- The employer must act on the recommendations within 60 days
The annual report
The Internal Committee must prepare an annual report and submit it to the employer and the District Officer. It records the number of complaints received, complaints disposed of, cases pending for more than 90 days, workshops and awareness programmes held, and action taken.
Many districts expect the report for the previous calendar year by 31 January, and a nil report should be filed even if no complaints were received. Check the notification issued by your District Officer. Companies must also state in the Board's report that they have complied with the provisions on constituting the Internal Committee.
Penalties
Failing to constitute an Internal Committee, failing to act on its recommendations or otherwise breaching the Act can attract a fine of up to Rs 50,000. For repeated breaches the penalty can be doubled, and the business registration or licence can be cancelled or not renewed.
A practical checklist for small businesses
- Count employees in each location, including interns and contract staff
- Constitute the Internal Committee with an external member and issue the written order
- Publish the POSH policy and display notices
- Train committee members and run awareness sessions for all employees
- Add POSH responsibilities to manager training
- Keep a confidential register of complaints and outcomes
- File the annual report on time, including nil reports
How SimplyHR can help
SimplyHR's statutory compliance team helps you constitute the Internal Committee, prepare annual reports and keep records inspection-ready. Our policy team drafts POSH policies, and our manager training programmes cover what every manager must do when a concern is raised. A mid-year compliance review is a good time to check your POSH setup.
This article is general information and not legal advice.