Employee Drug Testing: OSHA’S View & The Impact on Workers Compensation Benefits

Employee drug testing programs continue to be a hot topic and are essential for most businesses—the restaurant and hospitality industry is no exception. Are they legal? Do employers have to have an employee drug testing policy? Or what if you own multiple businesses in different states? Do the rules change? Below we cover some of the most common questions surrounding employee drug testing and workers’ compensation benefits.

Cost of Employee Drug Testing

The average drug test costs from $30-$60 for urine tests to approximately $200 for blood and hair tests. It’s important to note that workers’ compensation insurance does NOT pay for post-accident drug tests—it pays for medical treatment. In addition, bills sent directly to carriers will be returned to either the clinic or employer.

Does OSHA Prohibit Post-Incident Drug Testing Programs?

TheOccupational Safety and Health Commission (OSHA) Final Rule issued, May 12, 2016, prohibits employers from retaliating against employees for reporting work-related injuries and illnesses. Additional clarification by OSHA was released in a memo on October 11, 2018, which clarified OSHA’s position on post-incident drug testing stating, “The Department believes that many employers who implement safety incentive programs and/or conduct post-incident drug testing do so to promote workplace safety and health. In addition, evidence that the employer consistently enforces legitimate work rules (whether or not an injury or illness is reported) would demonstrate that the employer is serious about creating a culture of safety, not just the appearance of reducing rates.” Most instances of workplace drug testing are permissible.

Permissible Drug Testing

According to the OSHA, “Action taken under a safety incentive program or post-incident drug testing policy would only violate 29 C.F.R. § 1904.35(b)(1)(iv) if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health.”

Examples of permissible employee drug testing:

  • Random drug testing.
  • Drug testing unrelated to the reporting of a work-related injury or illness.
  • Drug testing under state workers compensation law.
  • Drug testing under other federal laws, such as a U.S. Department of Transportation rule.
  • Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees. Test all employees whose conduct could have contributed to the incident.

Employee Drug Testing Policy Best Practices & Training

  • Employers should have a formal employee drug testing policy
  • The employee drug testing policy should be acknowledged by all employees
  • Your employee drug testing policy must be compliant
  • The employee drug testing policy should be consistently enforced
  • Employers and managers should know the policy in depth
  • Consider implementing additional training for managers

Workers Compensation by State

As of 3/2/16, if an employee violates an employer’s alcohol or drug use policy, and that violation causes a work injury, the employee loses the right to all workers compensation benefits except for medical expenses (Wis. Stat. s. 102.58). Employers should strongly consider a post-accident drug testing policy.

Minnesota is 1 of 12 states with mandatory workplace drug testing laws. Insurance companies may deny workers compensation benefits due to a positive test. If an employee challenges denial, the burden is on the insurance company to show alcohol/drug use led to the injury. High legal standard; difficult to prove.

Employers may require employees to undergo post-accident drug or alcohol testing if they have a reasonable suspicion that the employee was using drugs or alcohol, based upon evidence that the employee: (1) caused an accident which resulted in injury to a person for which an Iowa OSHA (IOSHA) report may be required if they were an employee; or (2) property damages estimated to exceed $1,000. A positive test may lead to a claim denial by the “intoxication defense.” An injured worker has a right to fight the presumption that their intoxication was a substantial factor.

The employer must prove that intoxication is the “proximate cause” (as opposed to the “sole cause”) of the work accident, unless the employer is a member of the Tennessee Drug Free Workplace Program. Members of the Program enjoy the presumption that intoxication was the proximate cause of the work accident, absent the employee providing clear and convincing evidence to the contrary.

No workers compensation provision addressing drug testing. May still be entitled to benefits after a positive drug test. The employer has the burden of proving that the intoxication caused the work accident.

Employers can deny all benefits based on a positive drug test. Accredited or certified testing laboratory. Strongly recommended having a drug/alcohol policy with signed confirmation from the worker.

Learn how to avoid liability exposures across state lines by downloading workers compensation white paper.

Employee Assistance Program

An Employee Assistance Program (EAP) is a voluntary, work-based program that offers confidential assessments, short-term counseling, referrals, and follow-up services to employees who have personal and/or work-related problems. EAPs vary state by state.

Cost of Workers Compensation

The cost of your workers compensation obligation is a function of several factors:

  • The average cost of injuries in your class of business
  • The frequency and severity of recent employee injuries in your business
  • The track record of your insurance company

Society has a history of paying competitive dividends or offering competitive premium reductions (based on state laws).

Become Better Prepared for What Happens After an Injury Occurs

Workers compensation insurance is an important, and complicated, obligation for businesses of all sizes. At Society, we make it our job to keep costs down for you while extending needed services, income and benefits to your employees and their families. We take care of the smallest details that make the biggest difference in protecting your employees at a fair price. Contact your local Society agent for more information on our workers compensation coverage or dig through our Workers Compensation archives.

Disclaimer: This information is provided as a convenience, and it must not be assumed that it has detected all unsafe acts or conditions. This information is not professional advice; it is designed to assist you in recognizing potential safe work problems and not to establish compliance with any law, rule or regulation.


As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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