POSH Internal Committee Rules: The Ten Employee Threshold Is Not in Section 4, and Not a Word the Act Defines

Search for whether the POSH Act applies to your business and you will get one sentence, everywhere, in almost the same words: an Internal Committee is mandatory under section 4 for every workplace with ten or more employees. Law firms publish it. Compliance vendors publish it. Training companies selling POSH workshops publish it. It is the opening line of nearly every 2026 guide on the subject.

Read section 4 and there is no number in it. Not ten, not any other figure. The threshold those articles are describing is not in the section they attribute it to, and the one place a ten does appear in the Act is doing an entirely different job. It is worth noticing that the summaries cannot even agree with one another: the current crop says "ten or more", "more than ten", "not less than ten" and "above 10", which are three different thresholds. They disagree because none of them is quoting a provision that exists.

This matters more in 2026 than it did in any previous year, because for the first time somebody is actually checking. This article reads the duty from the Act, works the counting through on a real headcount, explains the proviso that quietly makes a three-branch business non-compliant on day one, and is honest about which parts were read first hand and which are reported.

What section 4 actually says

Section 4(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 opens like this:

That is the whole trigger. Every employer of a workplace. There is no headcount qualifier, no exemption for small establishments, no "where ten or more persons are employed" clause of the kind that appears all over the labour codes. Compare it with section 67 of the Code on Social Security, which we took apart in the crèche article: that section carries its threshold inside its own text, in the words "in which fifty employees ... are employed". Section 4 of the POSH Act carries nothing of the sort.

Two more things sit in section 4 that most coverage skips. The committee must be constituted by an order in writing. A committee that exists because four people were told in a meeting that they are on it is not constituted; there is no order. And under section 4(3) the Presiding Officer and every member hold office for a period not exceeding three years. That is a hard ceiling, not a default, and it has consequences discussed further down.

The only ten in the Act points the other way

The number everybody is quoting comes from section 6(1), which is about the Local Committee, not the Internal one. Section 6 requires every District Officer to constitute a Local Committee to receive complaints in two situations: where an Internal Committee has not been constituted due to having less than ten workers, and where the complaint is against the employer himself.

Read that carefully, because the difference is the whole article. Section 6 is a routing rule. It tells a woman where to take a complaint when there is no Internal Committee to take it to. It is written in the past tense of a fact that has already happened: an Internal Committee "has not been constituted". It does not say an employer below ten is relieved of the section 4 duty. It says the state will provide a forum for the case where one does not exist.

We are not going to tell you that a five-person shop is definitely obliged to run a four-member committee with an external NGO member paid a daily allowance. The two sections are in genuine tension, the standard practice built on section 6 is deeply entrenched, and no court has been asked to resolve it in the terms set out here. What we will say is that the confident sentence at the top of every guide is not supported by the text, and that a business sitting just under the line should treat its position as a judgement call rather than a settled exemption.

The threshold word is one the Act never defines

There is a second problem with section 6(1), and it is the kind of drafting artefact that decides real cases. The section counts workers. The Act does not define "worker".

Section 2 of the POSH Act runs from clause (a) to clause (p). It defines "aggrieved woman", "appropriate Government", "Chairperson", "District Officer", "domestic worker", "employee", "employer", "Internal Committee", "Local Committee", "Member", "prescribed", "Presiding Officer", "respondent", "sexual harassment", "workplace" and "unorganised sector". It defines "domestic worker" at clause (e). It never defines "worker" standing alone.

So the single numerical threshold in the whole Act is expressed in the one term the Act declined to define, while the term it defines with obsessive care, "employee" at clause (f), appears everywhere else. The sensible reading, and the one every practitioner in fact uses, is that the section 6 count runs on the section 2(f) definition of employee. Which brings us to the part that changes the arithmetic.

Who section 2(f) actually counts

Here is clause (f) in full, and it is worth reading slowly because almost every word in it is doing work:

Four phrases in there put people in your count who are not in your payroll system.

"Through an agent, including a contractor".The housekeeping staff, the security guards and the pantry staff who are on a facilities contractor's roll are employees for POSH purposes at the workplace where they work. You do not pay them. They are still counted.

"With or without the knowledge of the principal employer". This is the phrase that removes the obvious defence. A contractor who put two extra people on your site without telling you has still added two to your count.

"Whether for remuneration or not, or working on a voluntary basis". The unpaid intern counts. The volunteer counts. There is no wage floor and no requirement of payment at all.

"Probationer, trainee, apprentice". Named individually so that nobody can argue a trainee is not yet an employee.

A worked example, because the arithmetic is the point

Take a single-location design studio that considers itself comfortably too small to worry about this. Its payroll report, the number its accountant would give you, says eight.

Eight on the payroll, twelve in the count. On the standard reading of section 6, the studio is above the line and has needed an Internal Committee for as long as those four people have been on site. Nobody in the building believes that, because the number everyone quotes when they think about headcount is the payroll number, and the payroll number is the one section 2(f) was specifically drafted to look past.

This is the same failure mode we found in the crèche rules, where the OSH and Social Security counts of one payroll differ by the size of the management layer, and in the model standing orders, where the 300 test is any single day rather than an average. Threshold duties in Indian employment law are almost never counted the way your systems count.

The proviso that catches every multi-site business

The proviso to section 4(1) says that where the offices or administrative units of the workplace are located at different places, the Committee shall be constituted at all administrative units or offices.

Read that against how a growing Indian SME is actually shaped. A restaurant group with a head office and four outlets. A retailer with a warehouse and six stores. A clinic chain. A construction firm with a registered office and three active sites. In every one of those, the standard arrangement is a single committee at head office, with the branches assumed to be covered by it. The proviso says otherwise. It is drafted in the plural and it says all.

There is a practical difficulty here that the Act does not solve for you. A twelve-person outlet cannot easily field a Presiding Officer who is a senior-level woman employee at that outlet plus two more members plus an external member, four times over. Section 4(2)(a) anticipates part of it: where a senior-level woman employee is not available at that workplace, the Presiding Officer may be nominated from other offices or administrative units of the workplace, or from any other workplace of the same employer. That solves the Presiding Officer, and the same external member can serve several committees. It does not remove the requirement to constitute a committee at each unit.

The committee most small employers constitute is defective from birth

Assume you have decided to comply. The composition rules are specific, and three of them are routinely missed.

The external member is not optional and cannot be an insider. This is the most frequent defect in a small-employer committee. A four-person committee made up entirely of your own staff is not an Internal Committee within section 4(2); it is missing a required member. The Rules also provide for the external member to be paid, reported at two hundred rupees per day for holding proceedings plus reimbursement of travel, which tells you plainly that Parliament expected an outsider who is not otherwise on your books.

The three-year term expires whether or not anybody notices.Section 4(3) caps the term at three years. A large number of committees were constituted in the compliance wave of 2021 and 2022. Those terms have run out. A committee whose members' terms have expired is not a validly constituted committee, and an employer in that position is in exactly the same statutory posture as one that never constituted a committee at all, with the added difficulty that everybody internally believes the box is ticked.

Constituting it is not the end of section 19.The employer's duties run well past the committee: a safe working environment, display of the penal consequences of sexual harassment and the order constituting the committee at conspicuous places in the workplace, regular workshops and awareness programmes, providing the committee the facilities it needs to conduct an inquiry, securing the attendance of the respondent and witnesses, assisting a complainant who chooses to file under the criminal law, treating sexual harassment as misconduct under the service rules, and ensuring the committee files its report on time.

Why 2026 is different: somebody is now checking

For a decade the practical answer to "what happens if we do not?" was: nothing, until there is a complaint. That has changed, and it is the reason this topic moved in search volume rather than sitting where it had been since 2013.

The Supreme Court, in the line of orders flowing from Aureliano Fernandes v. State of Goa, has been pressing states on implementation rather than interpretation. On 3 December 2024 it directed states and union territories to survey how many public and private organisations had actually constituted Internal Committees. On 12 August 2025 it went further, directing a district-wise survey with physical verification by District Labour Commissioners working with the state Chief Labour Commissioners, to be completed within six weeks and reported up through the Chief Secretaries. A further order followed on 6 January 2026.

Running alongside it is SHe-Box, the central portal operated by the Ministry of Women and Child Development. Employers are being required to register the organisation, its Internal Committee and a named Nodal Officer on the portal, with the details verified by a District Nodal Officer. Several states have issued their own notifications with their own compliance windows; one district collector is reported to have given fifteen days from publication. The Nodal Officer is a distinct role and, as reported, cannot be the Presiding Officer of the committee.

The annual report, and the deadline that is not in the law

Two separate reporting duties are usually collapsed into one and given a date that does not exist.

Under section 21 the Internal Committee prepares an annual report in each calendar year and submits it to the employer and to the District Officer, who forwards a brief report to the state government. Rule 14 sets out the particulars: the number of complaints received in the year, the number disposed of, the number of cases pending for more than ninety days, the number of workshops or awareness programmes carried out, and the nature of action taken by the employer or District Officer.

Section 22 is a different duty, on the employer rather than the committee, and it is short enough to quote in full: the employer shall include in its report the number of cases filed and their disposal under the Act in the annual report of the organisation, or where no such report is required to be prepared, intimate the number of cases to the District Officer.

That second limb is the one small businesses miss. A private limited company that does not prepare the kind of annual report contemplated is not therefore excused. It is required to intimate the numbers to the District Officer instead, including, on the plain words, a nil return.

What it costs to be wrong

Section 26 puts the penalty at up to fifty thousand rupees for failure to constitute an Internal Committee, failure to act on the committee's recommendations, failure to file the annual report, or any other contravention of the Act or Rules. On a repeat breach the employer is liable to twice the punishment, or a higher punishment where one is prescribed under another law for the same offence, and to cancellation, withdrawal or non-renewal of the registration or licence required to carry on the business.

Fifty thousand rupees is not, by itself, a number that changes behaviour in a business of any size. The second half of that sentence is. A licence that is not renewed closes a restaurant, a clinic or a factory, and it does so on a compliance failure that costs a few thousand rupees a year to avoid.

The larger exposure is not the statutory penalty at all. The Ministry's own handbook cites Ms. G v. ISG Novasoft Technologies Ltd., in which the Madras High Court awarded Rs 1.68 crore in damages to an employee against an employer that had not constituted a complaints committee. Two honest caveats, both of which the handbook itself makes: that complaint predated the Act and was decided under the Vishaka guidelines, and it is a damages award in a civil claim rather than a penalty under section 26. It is not authority for what you will be fined. It is a reasonably clear indication of what the absence of a committee is worth to the other side when a case goes badly.

The part nobody plans for: knowing the number

Every duty in this article turns on a count, and the count is the part no system in a small business produces.

Your payroll knows who you paid last month. It does not know about the contractor's two housekeeping staff, because you never paid them. It does not know about the unpaid intern, because there was nothing to pay. It usually does not distinguish an apprentice or a probationer as a person on site rather than a line item. And it cannot tell you the date you crossed a threshold, only where you stand today, which matters because a duty that attached in March is not discharged by noticing in September.

Reduced to what you would actually need on hand: a headcount for each of your locations separately, not one company total, because the proviso to section 4(1) is per administrative unit. A count that includes people on site who are not on your payroll. The date each of them started, so you can establish when a threshold was crossed rather than that it has been. And the dates your committee members were nominated, so the three-year expiry is a diary entry rather than a discovery.

This is the gap Shiftelio is built for. Staff are held per person and per location rather than aggregated into a monthly payroll figure, so a per-site headcount is a view of the same list rather than a spreadsheet exercise somebody does once. Contract and non-payroll staff who are on site can be tracked for attendance whether or not they are paid through you, which is precisely the population section 2(f) counts and payroll does not. And because joining dates sit on the employee record, the question the Act actually asks, how many people were at this workplace and since when, is answerable from the record. None of that is a POSH feature, and no software constitutes a committee or discharges a statutory duty. It just means the number you are counted on is a number you can produce.

A checklist to work through this week

1. Count each location separately. The proviso to section 4(1) is per administrative unit or office. A company total tells you nothing about whether you are compliant at your third branch.
2. Count on section 2(f), not on payroll. Add contractor staff working at the site, interns paid and unpaid, volunteers, probationers, trainees and apprentices. Expect a larger number than your accountant's.
3. If you have a committee, find the order in writing. No order, no valid constitution. It should also be displayed at a conspicuous place under section 19.
4. Check the nomination dates against the three-year cap. Anything nominated in 2022 or earlier has expired. Reconstitute and issue a fresh order.
5. Check you have a genuine external member. From an NGO or association committed to the cause of women, or a person familiar with issues relating to sexual harassment. Not one of your own staff, and entitled to be paid for sittings.
6. Check the one-half women requirement across the committee as constituted, including the external member.
7. Register on SHe-Box and appoint a Nodal Officer, and check whether your state or district has issued its own notification with its own window. The Nodal Officer should not be the Presiding Officer.
8. Put the annual report in the calendar, with the Rule 14 particulars, and confirm your District Officer's date rather than assuming 31 January. Do the section 22 intimation too, including a nil return.
9. Run the awareness programme. Section 19 requires workshops and awareness programmes at regular intervals, and the number of them is one of the five things the annual report has to state. An empty field there is a self-reported breach.
10. If you sit just below ten, decide deliberately. Do not rely on a sentence from a compliance blog. The exemption everybody assumes is an inference from section 6, not a provision of section 4.

The short version

Section 4 of the POSH Act tells every employer of a workplace to constitute an Internal Committee by an order in writing, and it contains no threshold at all. The ten that every guide attributes to section 4 is in section 6, where it describes when the Local Committee receives a complaint, and it is expressed in the one word, "workers", that the Act never defines. The definition the Act does supply, "employee" at section 2(f), counts contract staff engaged through an agent with or without your knowledge, people working for no remuneration at all, volunteers, probationers, trainees and apprentices. Your payroll number is not that number.

The proviso to section 4(1) requires a committee at every administrative unit, which makes a great many multi-branch businesses non-compliant while holding a written order they believe covers them. The three-year term in section 4(3) has quietly expired for the committees constituted in the 2021 and 2022 wave. The external member is a requirement, not a nicety. The annual report has prescribed contents and no prescribed date.

And the reason to deal with it in 2026 rather than later is that the enforcement posture changed while the law stayed still. District Labour Commissioners have been directed to verify committees physically, and registration on SHe-Box turns the presence or absence of yours into a row in a database. The count that decides all of it is a count nobody in the business currently produces.