Pre-Employment Drug Tests and Employee Compensation Rules

Fewer than 2% of job listings in the United States mention pre-employment drug tests. However, many companies rely on these tests as an essential part of hiring. Employers often see this step to be as important as a background check. Employers have a right to maintain a drug-free workplace. If someone arrives to work intoxicated, they could endanger themselves and others. Drug tests help establish suitability and rule out substance abusers.

Drug tests may also be a condition of continued employment. Some employers conduct periodic or random drug or alcohol screening across the workforce. Such testing occurs in regulated and non-regulated industries. They are another vital element of due diligence. However, there are some tricky questions surrounding these requirements. Namely, who pays for pre-employment drug screening?

Does an employer have to pay for time spent on drug testing? As it turns out, the answer is yes – in some circumstances. Rulings in federal court have clarified this issue in recent years. However, employers should pause and take stock of their procedures to ensure complete alignment with the law.

Job Applicants Aren’t Owed Compensation for Time Spent Testing, Court Says

Who pays for a pre-employment drug test when it’s part of a conditional job offer? A 2022 ruling in the federal appeals court provides clarity for some employees. At the heart of the case were individuals who had accepted a job offer and needed to pass a drug test. Grocery retailer WinCo Foods requires such tests to finalize employment offers.

Some applicants claimed the company owed them compensation for the drug testing process. WinCo, like many employers, covers the cost of drug tests for applicants and employees. Candidates were responsible for traveling to the testing lab on their own time. The suit plaintiffs alleged that they were now prospective employees. As such, they should receive hourly compensation from WinCo. The plaintiffs sought payment of wages for the travel and time involved in testing.

The Ninth Circuit Court of Appeals disagreed with the plaintiffs. The court found that there was no formal or implied employment contract yet. The supermarket and its job applicants were not yet in an employer/employee situation. Thus, the court ruled that the individuals were not technically employees of WinCo and were not owed any compensation for the time they were involved in employee drug testing.

What About Existing Workers?

Note that this case specifically concerned those applying for a job and accepting a conditional employment offer. The situation is different for existing employees subject to random drug testing.

When do employers drug test existing employees? The answer varies. Some workplaces use random testing to confirm that employees abide by drug-free policies. Others may test employees based on reasonable suspicion.

Ultimately, the reason does not impact who pays. If an employer directs an employee to undergo a test, they must pay wages for the time involved. The law treats employees as on the clock during travel to the testing site. The Fair Labor Standards Act mandates such compensation for employer-requested tests.

Can You Require Applicants To Pay for Their Tests?

As mentioned, job applicants aren’t owed hourly compensation for going to a drug test lab. Existing employees do receive compensation when an employer asks for a new test. What about a job applicant’s initial test and the associated fees? Are drug tests free for job applicants? In many states, the answer is yes.

There is no federal law on this subject, even in regulated areas. The Department of Transportation (DOT) requires a urine sample to test truck drivers and other vehicle operators. Even so, there are no clear rules about who pays. Without such laws, most employers elect to pay for Department of Transportation drug tests.

Many states operate a voluntary drug-free workplace program. Employers who participate must agree to follow some rules. For example, in Florida, the law says employers must pay for applicants’ drug tests. Similar laws exist in North Carolina, South Carolina, and Maryland.

In states that require employers to test, there are some exceptions. If applicants request a second test to dispute prior results, they must pay for the new test. Tests taken voluntarily aren’t the financial responsibility of the business.

Some states don’t have specific laws on this subject. For example, Texas lets employers decide who will pay to test for illicit drug use. Texan companies could, if they wished, shift the burden of testing costs to job applicants. However, this creates the potential risk of discrimination. Such impacts on applicants could draw the scrutiny of the EEOC or the Department of Labor. Most employers simply absorb the lab fees.

Creating a Smarter Drug Testing Policy

Drug tests can provide helpful information to employers. It’s advisable to take steps to protect your business from potential harm. Drug use can create unsafe conditions, especially in industries such as transportation and construction. A compliant and thorough policy is the key to fostering safety in your workplace.

You need a clear understanding of the law to design such policies. That understanding must include how and when you must pay for pre-employment drug tests. Review your policies today in light of recent rulings and the Fair Labor Standards Act. With services and support from backgroundchecks.com, you can prepare your business to streamline its hiring and testing workflows.