The woman employee recently complained to the police against Srinivas, who sings ghazals in Telugu, about the alleged harassment.
Based on the complaint, the singer was arrested and a case on charges of sexual harassment under IPC section 354(A) was registered against him, a police official said.
Srinivas has denied the allegations against him.
"I respect women...I treated the complainant like my daughter. It is untrue that I harassed her," the singer, popularly known as 'Ghazal Srinivas', told reporters before being arrested.