In written complaints to the head of the state women commission and the Amritsar police commissioner, the woman, working in the Markfed office here, alleged sexual harassment by the district manager, Kulwinder Singh Randhawa.
Randhawa denied all allegations levelled by the woman and said it was "a deep-rooted conspiracy" against him.
The woman alleged that Randhawa pulled her cheeks, forcibly kissed her and threatened her with transfer to another district if she raised her voice.
Additional Deputy Commissioner of Police Lakhbir Singh said a special investigation team (SIT) has been constituted to look into the complaint and it will be led by a woman police officer.
In a statement in Chandigarh, Markfed managing director Varun Roojam said Randhawa has been suspended over sexual harassment charges.
A committee has been formed by Markfed for carrying out a comprehensive probe into the matter, he said.
(With inputs from agencies.)