Understand how the POSH Act and Companies Act, 2013 intersect on workplace safety. ICC, disclosures, annual report and 2026 best practices for every employer.
Workplace safety compliance has moved from being a 'soft' HR concern to a board-level governance issue in 2026. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ā commonly called the POSH Act ā intersects directly with the Companies Act, 2013 disclosure regime. Companies that get either piece wrong now face both regulatory action by the District Officer and adverse reporting in the directors' report.
Who Must Comply
The POSH Act applies to every workplace, public or private, organised or unorganised, where ten or more employees are engaged on any day. This includes offices, factories, branches, warehouses, residential homes employing domestic workers and even digital-only remote teams. There is no exemption for startups, NGOs or proprietorships once the headcount threshold is hit.
Internal Complaints Committee (ICC)
- Presiding Officer: a senior woman employee of the organisation
- At least two members from amongst employees, ideally with social work or legal background
- One external member from an NGO or association working on women's rights
- At least half of the total members must be women
- Term of three years, after which fresh nominations are required
For workplaces with fewer than ten employees, complaints go to the Local Complaints Committee (LCC) at the district level.
Companies Act Disclosure Obligation
Section 134 of the Companies Act read with Rule 8(5)(x) of the Companies (Accounts) Rules, 2014 requires every company to include in its directors' report a statement confirming that it has complied with the provisions of the POSH Act and constituted the ICC. Listed companies additionally have to make disclosures in their Business Responsibility and Sustainability Report (BRSR) under SEBI norms, including the number of complaints received and disposed.
ICC Annual Report
Under Section 21 of the POSH Act, the ICC must prepare an annual report containing the number of complaints received, disposed of, pending beyond 90 days, awareness programmes conducted and the nature of action taken. This report has to be submitted to the employer and to the District Officer. Many District Officers in 2026 are publishing online portals for direct upload ā failing to file invites notice and statutory penalty.
Penalties for Non-Compliance
- ā¹50,000 fine for failure to constitute ICC, file annual report or take action under the Act
- Repeat offences can lead to twice the punishment and possible cancellation of business licence or registration
- Adverse remarks in the directors' report can attract MCA scrutiny and erode investor confidence
- Civil liability through compensation orders by the ICC, recoverable as land revenue arrears
Best Practice Checklist for 2026
- Draft and circulate a comprehensive POSH policy in English and the local language
- Constitute the ICC with valid composition and notify employees of contact details
- Conduct at least one in-person or live virtual awareness session every year
- Train ICC members through certified workshops in the first six months of their term
- Maintain a confidential complaints register with timestamps for the 90-day disposal clock
- File the annual report with the District Officer before 31 January each year
- Include the statutory POSH paragraph in the directors' report and the BRSR (for listed companies)
Conclusion
POSH compliance is not a checkbox ā it is part of the governance fabric your board is responsible for. Treat the ICC as a serious quasi-judicial body, train them properly, file annual reports, and weave the disclosure into your directors' report. Done well, this protects employees, directors and the company's reputation simultaneously.
