Starting July 14, 2025, the Ministry of Corporate Affairs (MCA) has rolled out new compliance requirements aimed at improving workplace safety and accountability. As part of these changes, companies will now need to include detailed disclosures about sexual harassment complaints in their Board Reports.

These updates come under the Companies (Accounts) Second Amendment Rules, 2025, as notified by Notification No. G.S.R. 357(E) dated May 30, 2025

Here is what is changing- 

Mandatory Disclosure of Sexual Harassment Complaints:

Under the revised rules, companies are now required to make specific disclosures in their Board Reports related to sexual harassment at the workplace.

As per Section 134 of the Companies Act, 2013, read with the amended Rule 8(5)(a) of the Companies (Accounts) Rules, 2014, companies must:

i. Provide a statement that the Company has complied with the provisions constituting an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 

ii. Disclose the following details regarding the complaints of sexual harassment:

1. Number of sexual harassment complaints received in the year
2. Number of complaints disposed off in the year
3. Number of cases pending more than 90 days.

Consequences of Non-compliance:

Non-compliance with these provisions can lead to penalties under Section 134(8) of the Companies Act, 2013. The fines are as follows:

• Company – ₹3,00,000
• Every officer in default: ₹50,000

However, certain relief is provided to companies of specific categories such as One Person Companies, Small Companies and Startups wherein the penalty is halved and is subject to the maximum limits below:

• Company – INR 2,00,000
• Officer in default – INR 1,00,000

Changes in a nutshell: 

 It is noteworthy that the previous mandate was a superficial and general one while the changes bring in stricter reporting and encourage better enforcement and oversight. The notification also serves as a reminder that POSH at the workplace is more than a checklist activity. Companies must be proactive in ensuring compliance to the POSH Act as well as take steps to ensure workplaces are safer for all.

Official Resources

•  https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/notifications.html

• MCA-Notification-regarding-Companies-Accounts-Second-Amendment-Rules-2025-dated-30.05.2025 (1)

Please reach out to us for any queries on Mandatory POSH Compliance for Companies.

For more blogs and articles, visit our official website. Contact us for workshops and queries related to POSH, EAP (Employee Assistance Program) , Diversity and Inclusion and Code Of Conduct.

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Sexual harassment is a serious problem that affects many people worldwide, hurting their dignity and basic rights. In 2013, India passed a law called the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, or POSH Act. This law gives a strong plan for dealing with sexual harassment at all types of workplaces (explained more below). The POSH Act, 2013 offers some unique advantages compared to filing a criminal case.

Definition of Sexual Harassment

The POSH Act clearly defines sexual harassment as any unwelcome sexual behavior that makes the workplace uncomfortable, intimidating, or offensive. It also includes situations where someone offers benefits in exchange for sexual favors (quid pro quo) or threatens to harm a person’s job or career if they don’t comply. This law acknowledges that sexual harassment can take many forms, such as:

• Physical touching or advances.
• Requests for sexual favors.
• Sexually suggestive comments.
• Displaying pornography.
• Any other unwanted physical, spoken, or non-verbal actions.
• Applicability

The POSH Act is wide-reaching and covers all types of workplaces, whether they are organized or unorganized, in the public or private sector. It also provides protection for women in places like educational institutions, sports institutes, hospitals, homes, or any other location where women may work or be involved in some way.

Definition of Employee

As per the POSH Act, an employee is any person working at a workplace, whether they are hired directly, indirectly, on a regular basis, temporarily, sporadically, or through a contract. This definition includes individuals of any gender, including those in probationary roles, apprenticeships, trainee positions, and even volunteers. The law acknowledges that anyone in the workplace can commit sexual harassment, and anyone can be a victim, regardless of their job status. Its goal is to provide protection to all women involved in work-related activities.

This wide-ranging definition of an “employee” ensures that no one is exempt from the Act’s provisions solely based on their job status.

Definition of Workplace

The POSH Act defines a workplace broadly, not limited to traditional office settings. It includes any place where a person works, is engaged in work-related activities, or visits for work purposes. This covers physical locations like offices, factories, shops, and other work sites. Importantly, it also applies to virtual or digital spaces where work happens, such as online platforms, telecommuting, or remote work arrangements.

This wide-ranging definition of a “workplace” ensures that women are safeguarded from sexual harassment, regardless of the type or location of their work. It’s worth noting that the Act also considers situations beyond the typical office, such as training programs, workshops, conferences, or official off-site events. Women participating in these events are entitled to the protections outlined in the Act.

Duties of Employers and Internal Committee (IC)

The POSH Act imposes various duties on employers to efficiently prevent and handle sexual harassment cases. Employers must set up an Internal Committee (IC) in workplaces having ten or more employees. In districts where organizations have fewer than ten employees or for complaints against the employers themselves, a Local Committee (LC) must be established by the District Officer. These committees are responsible for receiving complaints, conducting investigations, and suggesting suitable actions against those found guilty of sexual harassment.

Duties of Employer

Employers have several important responsibilities under the POSH Act:

• Ensure a safe working environment.
• Conduct regular awareness programs, training sessions, and workshops to educate employees about preventing sexual harassment and promoting a culture of respect and gender equality.
• Establish an Internal Committee and prominently display the names and contact details of its members.
• Display the penalties for sexual harassment at visible locations.
• Develop and share a comprehensive and easy-to-understand POSH policy that includes prevention and redressal guidelines, among other things.

Redressal Mechanism

The POSH Act places a strong emphasis on having a fair and prompt system for addressing sexual harassment complaints. It requires employers to include a complaint procedure in their POSH Policy (Service Rules) and ensure that the Internal Committee (IC) is trained to receive and address these complaints effectively. According to the Act, complaints should be resolved within 90 days. This quick resolution process is indeed a notable advantage of the POSH Law.

Confidentiality & Protection from Retaliation

Confidentiality and protection from victimization are of utmost importance under the POSH Act. Confidentiality applies to all aspects of the process, including individuals involved, documents, information, conciliation, inquiry, recommendations, and actions taken by the employer. Breaching confidentiality can result in penalties as outlined in the POSH Policy or as prescribed by the POSH Rules.

Complainants also have the right to seek interim relief from the Internal Committee (IC) during the inquiry proceedings. Employers must ensure that complainants and witnesses are not subjected to any discrimination or retaliation. This provision for interim relief to prevent retaliation is another noteworthy feature of the POSH Act.

Penalties and Consequences

The POSH Act includes strict penalties to discourage sexual harassment and ensure accountability. Employers who fail to comply with the Act’s provisions may face penalties, which can range from fines to the cancellation of licenses or registrations necessary for their business operations.

In cases where an individual is found guilty of sexual harassment, they may face disciplinary action, which can vary from a written apology to termination, depending on the seriousness of the offense. The recommendations of the Internal Committee (IC) may also include reformative measures such as counseling and community service. These progressive actions aim to help reform the harasser, which is a distinctive feature of the POSH Law.

When allegations of sexual harassment have been substantiated, the recommendations of the Internal Committee (IC) to the employer may include various actions, depending on the severity of the offense and the organization’s specific circumstances. These actions can include:

1. Issuing a written apology from the perpetrator.
2. Issuing a warning to the perpetrator.
3. Administering a reprimand or censure.
4. Withholding a promotion for the perpetrator.
5. Withholding pay raises or increments.
6. Terminating the respondent from employment.
7. Requiring the respondent to attend counseling sessions.
8. Mandating the respondent to perform community service.

These actions are determined by the IC in line with the principles of fairness and proportionality, and they aim to address and rectify instances of sexual harassment effectively.

Malicious Complaints

To establish a false and malicious complaint, there must be clear evidence that the complainant had a deliberate and harmful intent when making the accusation. Simply lacking evidence to support the complaint does not automatically make it false. If a false complaint is proven, the same penalties will apply to the person making the false complaint as would have been imposed on the accused if the original sexual harassment allegations had been true.

Conclusion

The Indian POSH Act of 2013 is a significant legal tool for addressing sexual harassment in workplaces. It offers clear definitions, accountability, a complaint system, and important features like quick resolution and remote access. This law is a milestone in promoting safe work environments. Employers and District Officers have a crucial role in making sure the law works effectively, which may still need improvement.

Please reach out to us for any queries on Key Provisions and Definitions under the POSH Act 2013.

For more blogs and articles, visit our official website. Contact us for workshops and queries related to POSH, EAP (Employee Assistance Program,) and Diversity and Inclusion.

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