Budget-Friendly PoSH Compliance Guide for Startups and SMEs

Many startups and small-to-medium enterprises (SMEs) struggle with PoSH compliance due to limited budgets and day-to-day operational commitments. However, non-compliance carries severe consequences, like penalties up to ₹50,000, reputational damage, employee dissatisfaction, and double the penalty amount and/or potential loss of business licence. But the reassuring part is that there exists a practical path forward. Building a PoSH-compliant and sexual harassment-free workplace does not always require expensive and complex infrastructure.

Through this blog, we will explore practical and legally sound ways to implement PoSH requirements, which are not just affordable but also help nurture a culture where safety and dignity are firmly upheld.

Enhance HR Capabilities with External PoSH Expertise

Leverage the mandatory external ICC member (Section 4(2)(c)) for impartial inquiry expertise.

Opt for Cost-Effective Online PoSH Training

Explore professionally designed PoSH training in India to deliver engaging, self-paced e-modules with quizzes and real-world scenarios for flexible employee learning. For a more interactive approach, choose scalable instructor-led webinars as a cost-effective alternative.

Use a Legally Aligned PoSH Policy Framework

Adopt a ready-made PoSH policy framework fully aligned with the 2013 Act, customised to your startup/SME’s size and structure. This framework covers all mandatory elements, definitions, ICC formation, inquiry timelines, and disciplinary actions for instant deployment and immediate compliance without drafting delays.

Maintain Records

Create a simple, confidential record with IC meeting minutes, complaint case logs (received, resolved, pending for more than 90 days), inquiry summaries (without exposing sensitive details per Section 16), and training records. This cost-effective approach provides the data foundation for the mandatory Section 21 annual report to the District Officer.

Conduct Regular Audits and Review Processes

Conduct annual compliance reviews aligned with statutory reporting obligations. Track complaint resolutions, confirm no cases exceed 90 days without justification, and document corrective actions. Review the policy annually to reflect regulatory amendments and your organisation’s working model. Prepare comprehensive annual reports for district officer and Board disclosures and maintain records supporting PoSH audit readiness.

True PoSH compliance happens when employees feel safe reporting sexual harassment, trust that inquiries will be fair and swift, and witness leadership act consistently. The following are affordable initiatives that help prevent sexual harassment and create a respectful workplace:

Make Your PoSH Policy Live, Not Hidden

A policy buried in a handbook is useless. Distribute key points via email, WhatsApp groups, team huddles, as well as induction sessions. Create simple infographics highlighting “What is sexual harassment?”, “How to report sexual harassment?”, and “What protections exist?” Post these on notice boards, the intranet, and break rooms. Mention PoSH commitments in welcome messages, performance reviews, and team communications. The goal is visibility: employees encounter messaging repeatedly, normalising the conversation.

Make Your IC Transparent and Accessible

Display IC member names, contact details, office locations, and photographs prominently using existing tools: notice boards, email, and intranet. Provide confidential communication channels, e.g., email, phone, and in-person meetings. Brief employees on Section 16 confidentiality protections and Section 12 interim measures—temporary protective actions such as relocation, additional leave, or no-contact orders that the IC can recommend during pending inquiries. Emphasise anti-retaliation protections under the Act’s broader framework. When employees see real faces and feel genuine accessibility, psychological barriers to reporting drop significantly.

Demonstrate Swift and Fair Accountability

An organisation acting promptly on complaints builds trust. When the IC completes inquiries within statutory timelines and management confidentially implements recommendations, it demonstrates commitment, using no-cost internal processes. Swift, fair inquiry processes cost nothing but offer psychological safety, reassure employees, and strengthen a culture of respect.

Use Inclusive, Simple Language

Avoid legal jargon; rather, use clear, everyday language with industry-relevant examples. Frame messages positively (‘We believe you. We are in this together’) rather than threateningly. Clarify that PoSH (statutory law) protects women against sexual harassment.

Track Progress and Share Metrics

Maintain a simple record including complaints received, resolved, and pending. Prepare the mandatory annual report under Section 21 and submit it to your district officer within the state deadline (usually 31st January, but verify locally). For Companies Act-registered entities, disclose in Board Reports: total complaints, number resolved, and cases pending for more than 90 days (MCA requirement from July 2025). Register your ICC and upload compliance documents via the SHe-Box (increasingly mandated by state authorities per Supreme Court directive). Maintain Section 16 confidentiality. This cost-effective approach ensures legal compliance and audit readiness.

Before year-end, verify these essentials:

• IC constituted with formal written notification.
• External member appointed and briefed on responsibilities.
• Comprehensive PoSH policy drafted, reviewed, and displayed.
• Annual PoSH awareness training conducted (attendance documented).
• Complaint procedure, inquiry process, and records maintained.
• Annual PoSH report prepared and submitted to the employer and District Officer within the prescribed state deadline.
• Policy is reviewed annually and updated for regulatory changes.
• All employees are aware of their rights, IC composition, and contact details.

PoSH compliance is both a legal mandate and a moral imperative. Organisations that invest in structured implementation avoid penalties while building cultures of respect and accountability. Safety improves morale, trust, retention, and external credibility with clients and investors.

Startups and SMEs that establish clear policy, functional Internal Committees, regular training, and fair discipline transform PoSH from a compliance burden into a competitive advantage in talent attraction and retention.

Complykaro supports organisations across every stage of PoSH compliance and consultancy, right from policy drafting and ICC setup to training, inquiry support, and annual reporting. Contact our PoSH experts today to assess your current compliance readiness and build a legally sound, respectful workplace culture.