POSH Compliance Is Not an HR Formality. It’s a Founder’s Liability.
Updated: 6 days ago
Chandni Barak is a lawyer and partner at Barak Legacy Law Chambers, Mumbai, with 15 years’ experience in AI governance, POSH compliance, and cross-border transactions. She advises startups and established businesses across India.
Website: https://www.baraklegacylaw.com
Most founders I advise treat POSH as paperwork: form a committee, circulate a policy, move on. That works until a complaint arrives, or a diligence team asks for your Internal Committee records before a funding round.
1. It applies to you, whatever your size.Any employer with 10 or more employees must constitute an Internal Committee (IC). Startups, LLPs, partnerships, agencies and offices of foreign companies are all covered. Below 10 employees, complaints go to the district-level Local Committee. Remote and hybrid teams are not exempt, because the “workplace” extends to any place visited in the course of employment, including offsite events and, in practice, digital channels.
2. The IC has to be set up properly.It needs a senior woman as Presiding Officer, at least two employee members committed to women’s causes or with social work or legal knowledge, and one external member from an NGO or with relevant expertise. An IC that exists only on paper, or has lapsed members, is treated as non-compliance.
display the penal consequences and IC details at the workplace
run regular awareness programmes and orientation for IC members
provide a safe working environment and assist during inquiry
file an annual report with the District Officer and cover it in your reporting
4. The penalties are not just the fine.Non-compliance attracts a penalty of up to ₹50,000, doubled for repeat offences, with possible cancellation of licence or registration. The larger cost is reputational: a mishandled complaint can reach employees, investors, clients and the press before you’ve responded.
5. Courts are watching.The Supreme Court in Aureliano Fernandes v. State of Goa (2023) came down hard on non-functional ICs and ordered authorities to enforce compliance. Judicial patience for “we didn’t know” is thin.
6. Investors will ask.In due diligence, POSH records are now a standard checklist item alongside tax and labour compliance. Clean documentation signals a well-run company. Gaps become warranties, indemnities and price negotiations.
A founder’s checklist
IC constituted, with a valid external member
Policy in force, communicated and acknowledged by employees
Annual training for staff and IC members
Complaint handling that is confidential and time-bound (inquiry within 90 days)
Annual report filed and records maintained
A clear line between the IC’s independent role and management’s influence
The bottom line
A founder who is the subject of a complaint should never be the one steering the inquiry. Build the process before you need it, because the day a complaint arrives is the worst day to design one.
Disclaimer: This article is for general information and is not legal advice. Consult a lawyer for your specific situation.
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