POSH Act 2025: New Amendments, Compliance Rules & Employer Obligations Explained

Workplace safety and dignity is not some ideal or lofty idea that we should strive to achieve; it is an obligation of our employers. In India this commitment has been the backbone since 2013 with the enactment of the Prevention of Sexual Harassment (POSH) Act. However, even good intentions fail to produce compliance issues and inconsistencies in processes, as well as changing expectations from regulators.

The 2025 is a big milestone in regard to POSH compliance in India. The Ministry of Corporate Affairs has come up with the Companies (Accounts) Second Amendment Rules, 2025, effective from 14 July 2025, which prescribes greater disclosures in the Board Report in regards to POSH. This new regulation has an impact on thousands of companies registered under the Companies Act, 2013.

Designed for HR professionals, company directors, compliance officers, startup founders and corporate legal teams, this comprehensive guide is for them. From the basics of the POSH Act to the most recent changes, it's all there, from what companies are now required to publish, the rights of complainants on report of an inquiry, to what steps can be taken to become fully compliant with POSH in 2025.

The Meaning, Objectives and Scope of POSH.

The acronym POSH stands for Prevention of Sexual Harassment. The POSH Act, 2013, is a landmark law in India, aptly named Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), to protect the women from sexual harassment in the workplace.

The Act followed the Vishaka Guidelines laid down by the Supreme Court (1997) in the Vishaka case which had given interim guidelines on sexual harassment in the workplace. It took many years of advocacy for the POSH Act to be passed and come into force in Parliament in 2013.

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The purpose of the POSH Act, 2013 is to:

• To eradicate harassment of women in the workplace of all forms, including sexual harassment.
• To create a safe, secure and dignifying environment for work.
• To set up a redressal mechanism with the help of Internal Complaints Committee (ICC) and Local Complaints Committee (LCC)
• To make sure complaints are investigated in a timely, fair and confidential manner
• To create a culture of accountability among employers for providing a harassment free workplace
• To reassure the public that the consequences for wrongdoing are clear and consistent, and the boy/girl scouts are accountable for their actions.

Scope and Applicability

The POSH Act will be applicable in all workplaces in India – both public and private, organised and unorganised, where women work. The term 'workplace' is “widened” in the Act. 
It includes:

• Government offices, courts and public bodies 
• Private business such as business enterprises,
• Factories, shops, commercial premises etc.
• Hospitals, educational institutions and NGOs
• Sporting venues and entertainment venues
• Domestic workers: people who work in homes.

All locations where employees conduct business activities for the employer.All locations employees visit while engaged in activities related to work for the employer.

Who Must Comply?

Every employer with 10 or more employees is required to constitute an Internal Complaints Committee (ICC). For workplaces with fewer than 10 employees, or where the complaint is against the employer, the District Officer constitutes a Local Complaints Committee (LCC).

Employee rights under the POSH Act:

• Right to complain within 3 months of the incident (may be extended for good reason)
• Right to a fair, confidential and time bound inquiry.
• Actions taken in accordance with the interim relief provisions of the inquiry (e.g. transfer, leave with pay, etc.)
• Right to a litigant's voice and to present his case.
• The child or their parents or guardians have the right to appeal the findings of the Internal Committee. 
• Complaint protection, retaliatory or victimisation protection.

What Is New in the POSH Amendment 2025?

The Ministry of Corporate Affairs (MCA) has issued the Companies (Accounts) Second Amendment Rules, 2025, which will bring about substantial alterations in the process of corporate disclosures required under the POSH framework. The rules will be in effect from 14 July 2025.

As per the revised regulations, companies must make certain disclosures regarding POSH in their annual report to the Board of Directors (Board Report) under Section 134 of the Companies Act, 2013. In this amendment, the focus is directly placed on mainstream corporate governance and financial reporting frameworks and the connection between the two is clearly established.

Why This Amendment Matters

The methods of monitoring POSH compliance were mainly, by the annual report of the Internal Committee and by district level monitoring. The new amendment takes POSH to the boardroom – and out of the HR department and into the boardroom as a governance, risk and compliance (GRC) matter.

Now directors, audit committees, and statutory auditors are de facto a part of the POSH compliance. These could include penalties under the Companies Act, 2013, for non-disclosure/mis-reporting in the Board Report, in addition to the regulatory consequences brought by the POSH Act.

Effective Date: 14 July 2025

Firms that are finishing their Board Reports for financial years that ended on or after 14 July 2025 (in practice, those finishing on or after FY 2024-25 annual reports) should ensure that they include the new POSH disclosures. Preparation of the necessary data should start now by compliance teams.

In the Board Report (effective from July 2025) it is compulsory to make POSH Disclosures.

Mandatory POSH Disclosures in the Board Report (Post July 2025)

The number of complaints received.

The number of sexual harassment complaints received by the company during the financial year should be mentioned in the Board Report. This means it is essential for the Internal Committee to keep up to date and current records of all complaints including those made informally and withdrawn.

The number of complaints resolved.

Businesses have to provide information on the number of complaints received and either resolved or disposed of in the year. This includes complaints that are settled in a conciliation and/or findings of the inquiry and/or withdrawal by the complainant.

Complaints Pending Beyond 90 Days

If a complaint cannot be resolved within 90 days (the maximum that an inquiry can take under the POSH Act), then it must be disclosed specifically. This provision will provide a strong audit trail and accountability mechanism because it will highlight investigations which are not completed or have been delayed to the board, auditors and shareholders.

Compliance with Internal Committee Requirements

The Board Report shall include confirmation about the establishment of a duly constituted Internal Complaints Committee in the company.

• The ICC has the necessary membership (at least 4 members, one of whom must be from outside the ICC)
• The Presiding Officer is a highly-placed woman staff member.
• A minimum of 50% of the members are female
• One external member from an NGO/Association that is dedicated to issues of women.
• Training and Awareness Compliance

Companies should report on whether or not companies' ICC members and employees have undertaken required orientation and sensitisation programmes throughout the year.

Is It Mandatory to Provide the POSH Inquiry Report to the Complainant?

This is one of the most common questions asked about — and misconceived — questions in POSH compliance. 

The Inquiry Process Under POSH

After a complaint is made to the ICC, the ICC will carry out a fact-finding investigation. The inquiry has to be finished within 60 days. This involves a chance for the complainant and the respondent (the accused) to present their case, call witnesses and introduce evidence.

Once the ICC is finished investigating, it will produce a written inquiry report, which includes its findings and recommendations. This report is submitted to the employer who is required to take action within 60 days on the recommendations.

The Rights of Complainant and Respondent:

The POSH Act outlines in Section 13 that the complainant and the respondent should have access to the report from the inquiry. This is a right, not a discretion 

• The complainant will be given a copy of the inquiry report to enable them to understand the findings and if necessary to appeal against them.
• The respondent also has access to the inquiry report so as to exercise their right of appeal.
• Both parties can appeal to the employer or afterwards to the relevant authority or court.

Legal Position Regarding Inquiry Reports:

The access to the report of the inquiry has been recognised by the courts and tribunals in India in every instance. The refusal to grant access to the inquiry report can be argued to be an infringement of the principles of natural justice and can vitiate the entire proceedings of the inquiry.

The High Courts of some states have ruled that the ICC proceedings, although quasi-judicial, be conducted in a “procedural manner that guarantees procedural fairness. This fairness includes the right to know the findings which can affect a person's life.

Importance of Natural Justice in POSH Inquiries

• Both sides should be listened to
• The inquiry report must include reasons 
• The ICC must not have a bias and if there is any member with a conflict of interest, then this member must recuse themselves from the ICC
• Both parties have to be made aware of the results and the reasoning behind it

What If a Company Refuses to Share the Inquiry Report?

A company which refuses to provide the inquiry report to the complainant or the respondent is in violation of Section 13 of the POSH Act. The complainant may:

• Make a complaint to the Local Complaints Committee or the relevant district authority
• Challenge the High Court's failure to grant natural justice before the court through a writ petition.
• Report to the labour authorities about non-compliance by the employer

How Companies Can Prepare for POSH Compliance

To comply with POSH companies should audit their Internal Complaints Committee (ICC), update POSH policies to reflect recent amendments, and maintain accurate records of complaints for Board Report disclosures. 

Employers must educate boards and audit committees about new compliance obligations, conduct regular POSH awareness and ICC training sessions, and establish clear procedures for sharing inquiry reports as required by law.

How Insaaf99 Can Help

Insaaf99 helps businesses stay POSH compliant through expert online legal advice, policy drafting, Internal Committee support, employee training, compliance audits, and regulatory updates. Their legal professionals assist organizations in implementing effective workplace harassment prevention measures, managing inquiries, and meeting 2025 POSH reporting and disclosure requirements with confidence. 

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Conclusions: 

The 2025 amendments further strengthen this by making POSH compliance a board level accountability issue which is reported to shareholders, auditors and regulators.

As reflected in the Companies (Accounts) Second Amendment Rules, 2025, which will be effective from 14 July 2025. Firms that take a serious approach to POSH compliance – one that is more than a piece of paper – will be more likely to be better protected legally, reputationally and as an employer of choice.

Whether you're an HR professional reviewing your ICC's constitution, a company director signing off the Board Report or a startup founder creating your first compliance framework, it's time to get POSH compliance right this 2025.

FAQs

Q1: What is the POSH Act?

Ans: The POSH Act, 2013 is an Indian law that protects employees from sexual harassment at the workplace and requires employers to provide a safe working environment.

Q2: What changed in POSH compliance in 2025?

Ans: From July 14, 2025, companies must make additional POSH-related disclosures in their Board Reports, including complaint statistics and compliance with Internal Committee requirements.

Q3: Is it mandatory to share the POSH inquiry report?

Ans: Yes. Under Section 13 of the POSH Act, the Internal Committee must provide a copy of the inquiry report to both the complainant and the respondent after completing the investigation.