Most small employers believe POSH is a large-company problem. It is not. The obligation to constitute an Internal Committee starts at ten employees, the composition is prescribed down to who may sit on it, and getting it wrong carries a fine plus something more damaging — an inquiry that a tribunal can set aside entirely.
Ten or more employees at a workplace means a mandatory Internal Committee. Below ten, there is no IC requirement, but complaints go to the district Local Committee and the employer's other duties continue to apply.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 applies to every workplace, not to companies above a size threshold. What the threshold decides is where the complaint is heard, not whether the law reaches you.
The bottom line
10 or more employees: constitute an Internal Committee with the prescribed composition, including a mandatory external member.
Fewer than 10: no IC, but a complaint goes to the Local Committee constituted by the District Officer, and your duties on prevention, awareness and assistance continue.
Either way: the count includes contract staff, interns, probationers and volunteers — not just people on your payroll.
Counting to ten
This is where small employers most often get the answer wrong, because the Act's definition of "employee" is far broader than the payroll.
It covers people engaged on a regular, temporary, ad hoc or daily wage basis, whether directly or through an agent or contractor, with or without the knowledge of the principal employer, for remuneration or on a voluntary basis, and whether the terms are express or implied. It expressly includes a co-worker, contract worker, probationer, trainee, apprentice or a person called by any other name.
So a company with six people on the payroll, three contractors working from the office and two unpaid interns is at eleven, not six. The IC obligation is live.
"Workplace" is similarly broad, extending to any place visited by the employee arising out of or during employment, including transport provided by the employer. Remote and hybrid arrangements do not remove the obligation.
Who must sit on the Internal Committee
The composition is prescribed, and a committee constituted incorrectly is a committee whose findings can be challenged.
- A Presiding Officer — must be a woman employed at a senior level at the workplace. If no senior woman is available at that workplace, one may be nominated from another office, unit or workplace of the same employer.
- At least two members from among the employees — preferably committed to the cause of women, or who have experience in social work, or legal knowledge.
- One external member — from a non-governmental organisation or association committed to the cause of women, or a person familiar with issues relating to sexual harassment.
Two further rules apply. At least one-half of the total members must be women. And members hold office for a term not exceeding three years.
The external member is the requirement small companies most often skip, usually because it seems like an unnecessary expense for a ten-person office. It is not optional, and its absence is the easiest way for a respondent to challenge the entire inquiry later.
If you have fewer than ten employees
You do not constitute an IC. That is the only thing the threshold changes.
A woman who wishes to complain approaches the Local Committee, which every District Officer is required to constitute for exactly this situation — small establishments, and cases where the complaint is against the employer themselves.
Your remaining duties are unaffected. The employer must still provide a safe working environment, display the penal consequences of sexual harassment and the details of the Local Committee at a conspicuous place, organise awareness and orientation, assist the woman if she chooses to file a criminal complaint, and treat sexual harassment as misconduct under the service rules.
Note the second limb above: even in a large company with a properly constituted IC, a complaint against the employer goes to the Local Committee, not the IC.
The timelines
These are short, and they are the ones committees miss.
- Complaint: within three months of the incident, or of the last incident in a series. The committee may extend this by a further three months for recorded reasons.
- Inquiry: completed within 90 days.
- Report: submitted to the employer within 10 days of completing the inquiry.
- Action: the employer acts on the recommendations within 60 days of receiving the report.
- Appeal: available to either party, generally within 90 days.
Separately, the IC must file an annual report with the District Officer, and companies must disclose their POSH compliance in the Board's report.
What non-compliance costs
The direct penalty is a fine of up to ₹50,000 — for failing to constitute an IC, failing to act on recommendations, or failing to file the annual return.
The consequences that actually hurt are the indirect ones. A repeat offence attracts twice the punishment and can lead to cancellation of the licence or registration required to conduct the business. And an inquiry conducted by a defectively constituted committee can be set aside, leaving the employer having dismissed someone on findings that no longer stand — a far more expensive outcome than the fine.
Worked example
A design studio has seven people on payroll, engages two contract illustrators who work from the studio three days a week, and hosts one intern.
The headcount for POSH purposes is ten, so an IC is mandatory. The studio has four women, one of whom is a senior designer — she can be the Presiding Officer. Two more employees join as members, and the studio engages an external member from a local NGO working on women's issues, paid the prescribed fee per sitting.
That gives a four-member committee, at least half women. It displays the penal consequences and the committee's details in the studio, runs an awareness session, and diarises the annual report.
Had the studio counted only its seven payroll employees, it would have concluded no IC was needed — and been wrong, with the error surfacing at the worst possible moment.
Common mistakes
- Counting only payroll employees. Contractors, interns, trainees and volunteers all count.
- Skipping the external member. The most common defect, and the easiest ground on which to challenge an inquiry.
- Appointing a man as Presiding Officer. The Presiding Officer must be a woman employed at a senior level.
- Letting the committee lapse. Members hold office for a maximum of three years; committees are frequently constituted once and forgotten.
- Treating it as an HR process. The IC exercises powers of a civil court in respect of the inquiry; it is not an internal chat.
- Assuming remote workers are outside the workplace. "Workplace" is defined broadly.
- Routing a complaint against the employer to the IC. That goes to the Local Committee.
- Forgetting the annual report to the District Officer.
Checklist
- Count everyone — payroll, contract, agency, interns, trainees, volunteers.
- At ten or above, constitute the IC: senior woman as Presiding Officer, two or more employee members, one external member, at least half women.
- Record the constitution in writing with a defined term of not more than three years.
- Below ten, identify your District Officer's Local Committee and display its details.
- Display the penal consequences of sexual harassment conspicuously at the workplace.
- Adopt a written POSH policy and make sexual harassment misconduct under your service rules.
- Run awareness sessions and keep attendance records.
- Diarise the inquiry timelines and the annual report to the District Officer.
- Cover POSH compliance in the Board's report where applicable.
Frequently asked questions
Does POSH apply to a company with five employees? Yes, the Act applies — but you do not constitute an IC. Complaints go to the district Local Committee, and your prevention, display and assistance duties continue.
Do interns and contractors count towards ten? Yes. The definition of employee covers contract workers, probationers, trainees, apprentices and people working on a voluntary basis.
Can a man chair the Internal Committee? No. The Presiding Officer must be a woman employed at a senior level at the workplace.
Is the external member really mandatory? Yes, and omitting them is the most common way an inquiry is later challenged.
How long does an inquiry take? It must be completed within 90 days, with the report to the employer within 10 days and action within 60 days.
What if the complaint is against the employer? It goes to the Local Committee rather than the IC.
What is the penalty for not having an IC? A fine up to ₹50,000, with a repeat offence attracting double the punishment and possible cancellation of the business licence or registration.
Does the Act cover men? The Act as enacted provides redress to women. Employers who wish to extend equivalent protection to all employees commonly do so through their internal policy, which is permitted but sits outside the statute.