Table of contents
  1. Is a Drug-Free Workplace a Legal Requirement? 
  2. What Are the Advantages of Running a Drug-Free Workplace? 
  3. How to Comply With the Drug-Free Workplace Act 
  4. What About Drug Testing? 
  5. Consequences for Companies Violationing the Drug-Free Workplace Act
  6. Conclusion

A drug-free workplace has clear policies to prevent employees from being under the influence of alcohol or controlled substances. These policies also prohibit illegal drug activity in the workplace—such as the manufacturing, distribution, sale, or purchase of illicit drugs. 

Drug-free workplace policies can also prevent employees from working while under the influence of legally controlled substances—like medical marijuana or prescription pain medication—if the use of which will impair their ability to carry out their duties safely and effectively.

The Drug-Free Workplace Act of 1988 is a legal requirement for specific organizations. Under the act, all businesses that receive a federal grant or hold a federal contract of more than $100,000 are required to run a drug-free workplace. 

There are also other federal and state laws that workplaces may need to adhere to when it comes to drug and alcohol policies. 

Federal grants and contracts

Before being awarded a federal grant or contract, you must show that you can maintain a drug-free workplace. Part of this process includes listing the addresses and locations of worksites and developing a clear drug and alcohol policy. 

Different agencies and organizations are certified at different frequencies, so make sure you’re aware of how often your company needs to be certified. 

What Are the Advantages of Running a Drug-Free Workplace? 

While it may only be a legal requirement for organizations with federal grants or certain federal contracts to comply with the Drug-Free Workplace Act, having a robust drug and alcohol policy can benefit any business.  

Drug and alcohol use often correlates with poor performance and decision-making. When employees are under the influence in the workplace, their productivity is likely to be negatively affected.

Some advantages of running a drug-free workplace include the following. 

  • Fewer accidents. Mistakes and accidents are less likely to occur if your employees aren’t under the influence of drugs or alcohol. 
  • Fewer injuries. Fewer injuries will reduce workers’ compensation claims and help boost employee morale
  • Better productivity. Maintaining a “clean” workplace will help ensure your employees are productive and motivated. 
  • You can apply for federal contracts. A drug-free workplace is a requirement for any business applying for a federal contract or grant. 
  • Your business will be more profitable. A drug and alcohol policy will help prevent the financial implications associated with employee substance misuse in the workplace.  

How to Comply With the Drug-Free Workplace Act 

To be compliant with the Drug-Free Workplace Act, there are regulatory requirements that your business will need to meet. 

  1. Publish a drug-free workplace policy 

Your policy needs to outline your company’s position on drug and alcohol use and the consequences of violating the policy. It should make employees aware that adhering to the policy is a condition of employment, and that they’re required to let you know within five days of relevant drug-related workplace convictions. 

The policy also needs to state that manufacturing, using, possessing, or distributing controlled substances is prohibited at all times. 

  1. Implement a drug-free awareness program 

Education is a key component of preventing drug-related issues in the workplace. It’s important to ensure employees understand the potential consequences of their actions. 

Your drug-free awareness program should outline the dangers of drug abuse and the consequences of violating your company’s drug-free policy. Programs should also be ongoing and contain information about the counseling, rehabilitation, and assistance programs that are on offer to your employees. 

Supervisors should be trained to implement your drug-free workplace program effectively. 

  1. Provide employees with a copy of the policy

Under the Drug-Free Workplace Act, you are required to provide each employee with a hard copy of your drug-free workplace policy. This can be included as part of the hiring process or as part of your company’s handbook. You may wish to have a record that your employee has read and understood the policy.

  1. Notify the appropriate agency or Grant Officer of any convictions. 

If you’re regulated by the Drug-Free Workplace Act, you need to report any relevant employee violations within ten days of being notified of them. Reports should include the grant identification number and the employee’s position within your company.  

  1. Respond to the employee violation

Under the Drug-Free Workplace Act, you must take appropriate disciplinary action within 30 days of finding out about a violation. Depending on the severity of the violation, this could include termination of employment. 

Employees who violate your drug-free workplace policy must complete a drug abuse assistance or rehabilitation program.

What About Drug Testing? 

Drug testing isn’t a requirement under the Drug-Free Workplace Act, but it’s a widely used method for enforcing drug-free workplace policies. 

Both federal and non-federal organizations use drug testing programs as both a deterrent and a way to catch those who may be working under the influence. Usually, random testing is the most effective method. 

You can make drug testing a condition of employment. Drug tests can also be conducted if you have reasonable suspicion that an employee is under the influence of a substance that’s affecting their ability to work. 

You may also wish to run a drug test for your employees if there has been an accident in the workplace, or as part of an employee’s annual physical—but make sure you notify them if you’re going to do this. 

There are some state and federal laws surrounding drug testing, so ensure you understand these before implementing your own program. 

Consequences for Companies Violationing the Drug-Free Workplace Act

If your organization violates the Drug-Free Workplace Act, there are several consequences. These are severe and could include immediate payment suspension, termination of your federal contract, and/ or being rendered ineligible for future contracts for five years. 

However, it’s important to understand that you won’t be in automatic violation of the Act if an employee breaks your drug-free workplace policy. Violations commonly occur due to an employee reporting too many drug-related issues, or if your company fails to run an appropriate drug awareness program. 


Regardless of legal requirements, maintaining a drug-free workplace is essential for protecting the health, safety, and well-being of your employees. Developing a clear drug-free policy, outlining the penalties for violations, and ensuring all employees are aware of the rules is a crucial part of preventing the misuse of alcohol and illicit substances in your workplace.