Drug and Alcohol Policy for Small Business
Quick Answer
A drug and alcohol policy explains the rules on drug and alcohol use at work, whether and when you test, and what happens if someone violates the policy. Most private small businesses aren't required by federal law to have one, but some are: federal grantees must maintain a drug-free workplace policy, and employers of CDL drivers must follow DOT testing rules. Under the ADA, people currently using illegal drugs aren't protected when an employer acts on that use, and tests for illegal drugs aren't treated as medical exams. State laws on testing and marijuana vary widely, so have an attorney review your policy.
Drug and alcohol problems don't just affect the person using. In a small business, one impaired employee can cause an injury, damage equipment, hurt a customer relationship or put coworkers at risk. A clear drug and alcohol policy sets expectations, gives managers a fair process to follow and shows employees where to get help.
This guide explains which federal rules may apply to your business, how drug testing fits in, how to handle an employee who seems impaired, how to support employees who ask for help and what to put in your policy. It includes a free template.
Note: This is general information, not legal advice. Drug testing and marijuana laws vary a lot from state to state, and some states limit when and how employers can test. Have an employment attorney review your policy before you use it.
Do Small Businesses Need a Drug and Alcohol Policy?
For most private small businesses, federal law doesn't require a written drug and alcohol policy. But there are important exceptions, and many businesses choose to have one anyway because it makes expectations clear.
| Situation | What applies |
|---|---|
| Most private businesses | No general federal requirement; state law may apply to testing |
| Federal grantees | Required to establish and maintain a drug-free workplace policy |
| Federal contractors | Many are required to maintain a drug-free workplace policy |
| Employers of CDL drivers | DOT drug and alcohol testing rules apply to those drivers |
| Other DOT-regulated jobs | Other transportation industries have their own DOT testing rules |
| Businesses with 15 or more employees | The ADA applies, which affects how you handle drug and alcohol issues |
According to SAMHSA, all federal grantees are required by law to establish and maintain a drug-free workplace policy, and many federal contractors are too. If you have federal contracts or grants, review the specific requirements in your agreements.
The ADA and Drug and Alcohol Use
The Americans with Disabilities Act (ADA) covers employers with 15 or more employees. The EEOC explains a few key points that shape a drug and alcohol policy:
- Current illegal drug use isn't protected. The EEOC says employees and applicants currently engaging in the illegal use of drugs are not covered by the ADA when an employer acts on the basis of such use.
- Drug tests aren't medical exams. The EEOC says tests for illegal drugs are not subject to the ADA's restrictions on medical examinations.
- Same performance standards. The EEOC says employers may hold illegal drug users and alcoholics to the same performance standards as other employees.
The ADA's rule on current illegal drug use doesn't apply in the same way to alcohol, but that doesn't mean an employee can drink at work or come to work impaired. You can prohibit alcohol use and impairment at work and hold everyone to the same conduct and performance standards. Because these situations can get complicated, especially when an employee asks for help or time off for treatment, talk with an employment attorney before taking action.
DOT Testing for CDL Drivers
If your business employs drivers who need a commercial driver's license (CDL), federal Department of Transportation rules apply. The Federal Motor Carrier Safety Administration (FMCSA) lists these DOT drug and alcohol tests for CDL drivers:
| Test | What FMCSA says |
|---|---|
| Pre-employment | An employer must receive a negative drug test result |
| Post-accident | Drug and alcohol tests may be required after crashes |
| Random | CDL drivers must be randomly tested throughout the year |
| Reasonable suspicion | Drivers who appear to be under the influence can be immediately tested |
| Return-to-duty | Required for drivers who tested positive, refused or otherwise violated the prohibitions |
| Follow-up | Prescribed by the substance abuse professional, a minimum of 6 directly observed tests in 12 months |
DOT testing has detailed procedures, and many small carriers use a third-party administrator to manage random testing pools and paperwork. If you have both CDL drivers and other employees, you may have a DOT program for drivers and a separate company policy for everyone else.
Drug Testing Options for Other Employees
For employees not covered by DOT rules, whether and when you test depends on your business and your state's law. Common approaches:
| Type of testing | How it works | Things to consider |
|---|---|---|
| No testing | Policy prohibits use and impairment at work but doesn't test | Simplest; relies on observed behavior |
| Pre-employment | Applicants are tested after a conditional job offer | Check state rules on notice and timing |
| Reasonable suspicion | Test when there are specific signs of impairment | Train supervisors and document observations |
| Post-accident | Test after workplace accidents | Be careful with retaliation rules for injury reporting |
| Random | Unannounced tests of a selected group | Often limited by state law for non-DOT jobs |
Whatever you choose, apply it consistently. Testing some employees but not others in the same role, without a clear reason, can create discrimination risks.
A Note on Post-Accident Testing
OSHA's recordkeeping rule says employees have the right to report work-related injuries and illnesses, and employers may not discharge or discriminate against employees for reporting. A blanket rule that tests everyone who reports any injury, regardless of whether drugs could have played a role, may discourage reporting. Many employers limit post-accident testing to situations where impairment could reasonably have contributed. Get advice from an attorney or safety professional when setting this rule.
Marijuana and State Laws
Marijuana is where policies get most complicated. State laws on medical and recreational marijuana vary widely, and some states limit when employers can test for it or take action based on off-duty use. At the same time, DOT rules for CDL drivers apply regardless of state marijuana laws.
Practical steps:
- Prohibit use, possession and impairment at work and during working time, which almost every policy can do.
- Check your state's rules on testing and off-duty use before deciding how your policy treats marijuana.
- Treat safety-sensitive jobs carefully, such as drivers and equipment operators.
- Have an attorney review the marijuana section of your policy, and update it when laws change.
What to Include in Your Policy
| Section | What it covers |
|---|---|
| Purpose | Safety, health and a productive workplace |
| Who it covers | Employees, managers, owners and anyone working on your behalf |
| Prohibited conduct | Use, possession, sale or being impaired at work |
| Alcohol at company events | Whether and how alcohol is allowed |
| Prescription medications | Reporting effects that could affect safety |
| Testing | Whether, when and how testing is done |
| Reasonable suspicion | How supervisors respond to signs of impairment |
| Getting help | Employee assistance resources and how to ask for help |
| Confidentiality | How test results and related information are protected |
| Consequences | What happens if the policy is violated |
| State law | A note that the policy follows applicable state law |
Free Drug and Alcohol Policy Template
Drug and Alcohol Policy
Purpose: [Company] is committed to a safe, healthy and productive workplace. Drug and alcohol use can put employees, customers and the public at risk.
Who this covers: All employees, managers and owners while working, on company property, in company vehicles or at company events.
Prohibited conduct: Employees may not use, possess, sell or distribute illegal drugs at work, or report to work or perform work while impaired by drugs or alcohol. Employees may not drink alcohol during working time, except at company events where alcohol is approved, and must never drive a company vehicle or operate equipment after drinking.
Prescription and over-the-counter medications: If a medication may affect your ability to work safely, tell [contact] so we can discuss whether any temporary adjustments are needed. You don't need to share your diagnosis.
Testing: [Choose and describe: pre-employment after a conditional offer / reasonable suspicion / post-accident where impairment may have contributed / DOT testing for CDL drivers under federal rules / no testing.] Testing will follow applicable state and federal law.
Reasonable suspicion: If a supervisor observes specific signs that an employee may be impaired, the employee will be removed from duty, and [testing / a meeting with management] may follow. The employee will not be allowed to drive.
Getting help: Employees who want help with a drug or alcohol problem are encouraged to come forward before a policy violation occurs. Resources: [EAP or local resources; SAMHSA National Helpline 1-800-662-4357].
Confidentiality: Test results and related information will be kept confidential and shared only with those who need to know.
Consequences: Violations may lead to discipline, up to and including termination, consistent with applicable law.
State law: This policy will be applied consistently with applicable state and local law.
Have an employment attorney review the template, especially the testing and marijuana sections, before you use it.
How to Handle an Employee Who Seems Impaired
This is one of the hardest situations a manager can face. A clear process helps you act quickly and fairly:
- Focus on safety first. Remove the employee from any safety-sensitive task, such as driving or operating equipment.
- Talk privately. Describe what you observed and ask if they're okay. Avoid accusations or diagnoses.
- Get a second observer if possible, such as another manager.
- Document specific observations: slurred speech, smell of alcohol, unsteady walking, confusion, unusual behavior, time and location.
- Follow your policy on testing or next steps.
- Don't let them drive. Arrange a ride home if needed.
- Follow up after the employee has had time to recover, following your policy and any legal advice.
Sample observation note: "Tuesday, 10:15 a.m., warehouse. I observed Chris stumbling near the forklift charging area and slurring words when answering a question. Maria (shift lead) also observed. Chris was removed from forklift duty. A ride home was arranged at 10:40 a.m."
Never diagnose or guess at a cause. Signs that look like impairment can come from medical conditions, such as low blood sugar or a stroke. If the employee seems seriously ill, call 911.
Supporting Employees Who Ask for Help
A good policy encourages employees to seek help before problems escalate. Consider:
- An employee assistance program (EAP), if you can offer one, or a list of local resources.
- The SAMHSA National Helpline (1-800-662-4357), a free, confidential treatment referral and information service.
- Unpaid or paid leave for treatment, consistent with your policies and any leave laws that apply.
- A clear return-to-work process, which may include a last-chance agreement in some cases.
Talk with an employment attorney when an employee asks for time off for treatment, because federal and state laws may protect that leave.
Alcohol at Company Events
Holiday parties and team events often include alcohol. Set expectations in advance: limit drinks, serve food, offer non-alcoholic options and arrange rides. Remind employees that the drug and alcohol policy and code of conduct still apply. See are company events paid time and the employee code of conduct template.
Pay and Time for Drug Tests
For current hourly employees, time spent going to and taking a required drug test during working hours is generally safest to treat as paid work time. Under federal rules, time spent waiting for and receiving medical attention on the premises, or at the employer's direction during the employee's normal working hours on days they work, counts as hours worked, and a required test at the employer's direction is similar. Record the time like any other work time.
Common Drug and Alcohol Policy Mistakes
- Copying a policy from another state without checking local law.
- Testing inconsistently or singling out certain employees.
- Untrained supervisors who don't know how to document reasonable suspicion.
- Letting a possibly impaired employee drive home.
- Sharing test results beyond those who need to know.
- Ignoring DOT rules for CDL drivers.
- No path to help for employees who come forward.
- Outdated marijuana language after state laws change.
Drug and Alcohol Policy Checklist
| Step | Done? |
|---|---|
| Check whether DOT, federal grant or contract rules apply | |
| Check state testing and marijuana laws | |
| Decide whether and when to test | |
| Write the policy and have an attorney review it | |
| Train supervisors on reasonable suspicion | |
| Share the policy and collect acknowledgments | |
| List employee assistance resources | |
| Set rules for alcohol at company events | |
| Review the policy each year |
Rolling Out Your Policy
A policy only works if people know about it. When you introduce or update a drug and alcohol policy:
- Give employees advance notice before the policy takes effect, especially if you're adding testing.
- Explain the reasons: safety, fairness and a workplace everyone can count on.
- Walk through what's prohibited, how testing works if you test and where to get help.
- Have each employee sign an acknowledgment and keep it on file.
- Train supervisors separately on reasonable suspicion and documentation.
- Add the policy to new-hire onboarding. See the new hire orientation checklist.
Revisit the policy every year, and any time a relevant state law changes.
Keep Policies and Training Organized With Updoot
Updoot's SOP management keeps your drug and alcohol policy, reasonable suspicion steps and acknowledgments in one place. The employee time clock records time for required tests and training, and the payroll report shows those hours alongside regular work.
Sources
- EEOC: Fact Sheet on Disability Discrimination
- FMCSA: What Tests Are Required and When Does Testing Occur?
- SAMHSA: Drug-Free Workplace, Federal Contractors and Grantees
- SAMHSA: National Helpline
- eCFR: 29 CFR 785.43, Medical Attention
- eCFR: 29 CFR 1904.35, Employee Involvement (Injury Reporting)