The Act, which amends the Small Business Act ([15 USC 654} 15 U.S.C. 654 et seq.), is intended to:

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1 Drug-Free Workplace Act of 1998 PM:249:7651 In This Chapter SUMMARY OF PROVISIONS OVERVIEW The Drug-Free Workplace Act of 1998 was enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999 (H.R. 4328; [PL ] P.L ), which was signed on October 21, The Act, which amends the Small Business Act ([15 USC 654} 15 U.S.C. 654 et seq.), is intended to: Educate small business establishments about the advantages of a drug-free workplace. Provide grants and technical assistance, in addition to financial incentives, that will enable small employers to create drug-free workplaces. Assist working parents to keep their children drug-free. Encourage small business employers and employees to participate in a drug-free workplace program. This chapter summarizes the major provisions of the Drug-Free Workplace Act of SUMMARY OF PROVISIONS The Drug-Free Workplace Act of 1998 provides for a $10 million drug-free workplace demonstration program under which the Small Business Administration may award grants to, or enter into cooperative agreements or contracts with, "eligible intermediaries" to provide financial and technical assistance to small businesses (employers with 100 or fewer employees) seeking to establish a drug-free workplace program. Employers may attend drug-free workplace-related programs offered by eligible intermediaries without having to contract for any services offered by the organizations. Definitional Guidance Drug-Free Workplace The term "drug-free workplace program" is defined to mean a program that includes: A written drug-free workplace policy. The policy includes a clear statement of expectations for workplace behavior, prohibits employees from reporting to work or

2 working under the influence of alcohol or illegal drugs, prohibits the use or possession of illegal drugs in the workplace, and specifies the consequences of violations of the expectations and prohibitions. Drug and alcohol prevention training. At least two hours of training per employee, as well as additional voluntary drug and alcohol abuse prevention training for employees with children, are provided. Testing for illegal drug use by employees. Analysis of specimens is performed by a drug testing laboratory certified by the Substance Abuse and Mental Health Services Administration or, for purposes of forensic drug testing, approved by the College of American Pathologists. A medical review officer reviews each positive test result. Employee access to an employee assistance program. The EAP provides confidential assessment, referral, and short-term resolution of drug- and alcohol-related problems. Continuing alcohol and drug abuse prevention education. Eligible Intermediary PM:249:7652 The Act defines "eligible intermediary" to mean an organization that develops comprehensive drug-free workplace programs or provides drug-free workplace services. The organization has at least two years of experience in carrying out drug-free workplace programs, has a drug-free workplace policy in effect, and is located in one of the 50 states, the District of Columbia, or a U.S. territory. The Act invests the SBA with authority to contract with, and compensate, public and private entities to provide assistance to perform drug-free workplace-related activities. Employee The term "employee" means any prospective or current employee, supervisor, or manager; any officer of a small business concern who is active in managing the establishment; and any small business owner who is active in managing the concern. Medical Review Officer The term "medical review officer" means a licensed physician who has knowledge of substance abuse disorders. The term does not apply to any employee of a small business concern or any employee or agent of, or any person with a financial interest in, a drug testing laboratory. Requirements for Drug-Free Workplace Programs Each drug-free workplace program created with assistance made available under the Act is required to:

3 Establish, as reasonably necessary and appropriate, practices and procedures that ensure the confidentiality of drug-test results and the privacy of any employee participating in a rehabilitation program. Prohibit mandatory disclosure of medical information by an employee before a drug-test result has been confirmed as positive. Stipulate that a medical review officer reviewing test results report only final results, limited to those drugs for which an employee tests positive, in writing and in a manner that ensures the confidentiality of the information. Funding Authorization The Act authorizes appropriations of $10 million for fiscal years 1999 and Of the total amount made available, not more than the greater of 10 percent or $1 million may be used to enable small business development centers to provide information and assistance to establish drug-free workplace programs in small business establishments on or before October 1, (Small business development centers, or SBDCs, are sponsored by the Small Business Administration in partnership with state and local governments, the educational community, and private-sector organizations. The SBDCs provide assistance, counseling, and training to prospective and existing business people.) Resource Funding remains available until expended. For detailed information about the Small Business Administration, the designated administrator of the drug-free workplace grant program, see the SBA's online site ( or telephone the SBA Small Business Answer Desk at U-ASK-SBA ( ). Drug-Free Workplace Act of 1988 PM:249:7701 In This Chapter SUMMARY OF PROVISIONS OVERVIEW Most federal government contractors and employers that receive federal grants are required to provide and maintain a drug-free workplace under the Drug-Free Workplace Act of The statute ([PL ] P.L , 102 Stat. 4181; Title V, Subtitle D, [41 USC 701] 41 U.S.C ) applies to: All organizations awarded procurement contracts of $100,000 or more that are performed

4 in the territorial U.S. (The Federal Acquisition Streamlining Act of 1994 raised the threshold of covered contracts from $25,000 to $100,000, effective October 13, 1994.) All contracts and grants, regardless of amount, awarded to individuals. All recipients of federal grants, regardless of grant size or place where grant-funded activity occurs. The Act's requirements apply, case-by-case, to federal contracts, including purchase orders, and grants awarded on or after March 18, Subcontractors and subrecipients of grants are not covered by the statute. The Drug-Free Workplace Act was amended in 1994 ([PL ] P.L ), 1996 ([PL ] P.L ), and 1997 ([PL ] P.L ). SUMMARY OF PROVISIONS SAMPLE POLICY STATEMENT ON DRUG-FREE WORKPLACE To: All Employees From: [Company Name] Re: Policy on Drug-Free Workplace This is to reiterate, and state in a more formal way, our policy regarding the work-related effects of drug use and the unlawful possession of controlled substances on Company premises. Our policy is as follows: Employees are expected and required to report to work on time and in appropriate mental and physical condition for work. It is our intent and obligation to provide a drug-free, healthful, safe, and secure work environment. The unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance on Company premises or while conducting Company business off Company premises is absolutely prohibited. Violations of this policy will result in disciplinary action, up to and including termination, and may have legal consequences. The Company recognizes drug dependency as an illness and a major health problem. The Company also recognizes drug abuse as a potential health, safety, and security problem. Employees needing help in dealing with such problems are encouraged to use our employee assistance program and health insurance plans, as appropriate. Conscientious efforts to seek such help will not jeopardize any employee's job, and will not be noted in any personnel record. Employees must, as a condition of employment, abide by the terms of the above policy

5 and report any conviction under a criminal drug statute for violations occurring on or off Company premises while conducting Company business. A report of a conviction must be made within five (5) days after the conviction. (This requirement is mandated by the Drug-Free Workplace Act of 1988.) Employer Responsibilities PM:249:7701 To be eligible for contract awards or grants, employers must agree to meet certain requirements to keep their workplaces drug-free. Specifically, contractors and grantees other than individuals must agree to: Publish a policy statement prohibiting the unlawful manufacture, distribution, dispensing, possession, or use of controlled substances in the workplace. The policy statement also must specify actions that will be taken against employees who violate the policy provisions. In addition to publishing the policy statement, employers must provide covered workers with a copy of the document. [Note: The Act does not specify any particular format that employers must use to prepare the policy statement. For guidance, see "Sample Policy Statement on Drug-Free Workplace" below.] Establish a drug-free awareness program that informs employees about the dangers of workplace drug abuse; the employer's intent to maintain a drug-free workplace; the existence of any available drug counseling, rehabilitation, or employee assistance programs; and the penalties that may be imposed on employees who abuse controlled substances in the workplace. Employers should note that neither the Act nor the rules implementing the Act require contractors or grantees to establish an employee assistance program, to conduct any drug testing, or to incorporate any particular component into a drug-free workplace program. It is preferred that employers draft their own policies and create their own awareness programs, which can be better adapted to the needs of the particular workplaces than any government-wide guidance. Inform employees that they are required, as a condition of employment, not only to abide by their employer's drug-free workplace policy, but also to report any criminal convictions for unlawful drug-related activity occurring in the workplace. Employees must notify their employer no later than five days after a conviction. Notify the federal contracting or grant agency of any criminal convictions of employees for illegal drug activity in the workplace. The contractor or grantee must provide the notice within 10 days of learning about an employee's conviction. PM:249:7702 Take "appropriate" personnel action against any employee convicted of a criminal drug offense occurring in the workplace. Sanctions can range from termination of employment

6 to a requirement that the employee satisfactorily participate in an approved drug abuse assistance or rehabilitation program. The employer must act within 30 days after receiving notice of an employee's conviction. Make a "good faith" effort to continue to maintain a drug-free workplace by complying with the Act's requirements. The Act indicates that the reported number of employees convicted of criminal workplace violations of drug laws may be used to determine how good an effort an employer is making. It does not, however, provide an across-the-board standard for how many convictions would be sufficient to trigger such a determination. An employer that is a contractor or grantee that fails to comply with any of these requirements is subject to various penalties. (See the heading "Sanctions for Violations" below.) PM:249:7703 An individual may not contract with or receive a grant from a federal agency, unless the individual agrees, as a condition of receiving the contract or grant, that he or she will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance while performing contract work or conducting any grant-funded activity. [Note: An "individual" is defined as a "natural person"-terminology that indicates that the grantee or contractor is neither an organization, which is made up of more than one individual, nor a corporation, which may be viewed as a single "person" for legal reasons.] Drug Testing The Act does not mandate, or even mention, testing employees for illegal use of controlled substances. Alcohol Misuse/Alcohol Testing The Act does not address misuse of alcohol or alcohol testing. Implementation of the Act The Drug-Free Workplace Act makes use of existing suspension and debarment remedies for noncompliance. It is implemented by federal agencies through an amendment to the government-wide non-procurement suspension and debarment "common rule." This approach allows agencies to take advantage of existing administrative procedures and definitions, thereby minimizing regulatory duplication. Enforcement of the Act Compliance with the Act is checked as part of normal federal contract and grant administration and as part of normal federal auditing. The head of the federal agency that awarded the contract or grant is responsible for determining whether a violation has occurred.

7 Sanctions for Violations Employers that receive federal contracts or grants are subject to a number of sanctions for failing to meet the requirements of the Drug-Free Workplace Act. They risk suspension of payments or termination of the contract or grant (or both) if they: Fail to implement the steps required to establish a drug-free workplace. Report such a large number of employees who have been convicted of illegal workplace drug activity that it appears that there has not been a "good faith effort" to provide and maintain a drug-free workplace. (The Act does not specify how many employees must be convicted to trigger action against a contractor or grantee.) Failure to comply with the Act's requirements also can lead to debarment from participation in future contract or grant activity. If debarment proceedings are instituted and a final decision is made to debar an employer, the contractor, individual, or grantee may not receive any federal contract or grant or participate in the federal procurement process for a period of up to five years - two years more than the three years typically specified under other federal contract law enforcement systems. It is up to the contracting officer of the contracting agency to determine, in writing, that cause exists for suspension of payments, contract termination, or suspension or debarment, and to initiate appropriate action in accordance with applicable agency procedures and the Federal Acquisition Regulation-the mechanism for carrying out the law. The Act specifically requires revisions to the FAR to include rules for conducting suspension and debarment proceedings under the Act, including rules for notice and an opportunity to respond in writing or in person and for procedures necessary to ensure a complete and fair proceeding. Similarly, the head of the grant agency is responsible for making written determinations about and initiating actions against grantees that violate the law. PM:249:7704 Employer sanctions may be waived if it can be shown that suspension of payments, contract termination, suspension and debarment of the contractor, or refusal to allow a person to be treated as a responsible source would severely disrupt the contracting agency's operations to the detriment of the federal government or the general public. Similarly, suspension of grant payments, termination of the grant, or debarment of the grantee may be waived if such action would not be in the public interest. Only the head of the agency that awarded the contract or grant has authority to waive a suspension, termination, or debarment. Effect on Collective Bargaining The requirements of the Act, and rules implementing the Act, coexist with the collective

8 bargaining process; they do not compel any change in labor-management agreements. Federal agencies are not obligated to provide contracts or grants to organizations that fail to comply with a contract or grant condition imposed by law-for any reason. Compliance with the Act and regulations is a condition for receiving a contract or grant; preemption is not an issue. Labor and management cannot, through the collective bargaining process, nullify a contract or grant condition based on federal law; however, where the regulations provide discretion about the mode of compliance (as in deciding whether to discipline an employee convicted of a criminal drug offense in the workplace or to refer the worker for rehabilitation), labor and management may, through collective bargaining, determine what the mode of compliance will be. Effect on Other Laws The requirements of the Act, as well as the rules implementing the Act, coexist with state and local law. The federal law does not preempt the laws of other nations or international law. Information Sources One source of regularly updated information on the Drug Free Workplace Act is the U.S. Department of Labor's online service. Employment Laws Assistance for Workers and Small Businesses, or elaws ( Specific questions should be directed to the contract or grant administration office at the federal department or agency that awarded the contract or grant. Copyright 2002, The Bureau of National Affairs, Inc.

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