Drug-Free Workplace Act of 1988

The Drug-Free Workplace Act of 1988 requires some federal contractors and all federal grantees to agree that they will provide drug-free workplaces as a condition of receiving a contract or grant from a federal agency. The Act does not apply to those that do not have, nor intend to apply for, contracts/grants from the federal government. The Act also does not apply to subcontractors or subgrantees.

Because the Act applies to each contract or grant on a case-by-case basis, you will need to determine coverage for each federal contract or grant you have, or for which you are applying. If your company has a grant that is covered under the Act and a contract that is not, the Act does not cover the entire company—only employees working on the covered grant must comply. Although you may not be required to provide a drug-free workplace for all your employees, you may find it cost-effective to do so—and a good way to protect your workers and your business profits.

Although all individuals with federal contracts or grants are covered, requirements vary depending on whether the contractor or grantee is an individual or an organization.

It is recommended that you go through the Advisor to determine coverage and requirements for each of your federal contracts or grants.

Although all covered contractors and grantees must maintain a drug-free workplace, the specific components necessary to meet the requirements of the Act vary based on whether the contractor or grantee is an individual or an organization. The requirements for organizations are more extensive because organizations have to take comprehensive, programmatic steps to achieve a workplace free of drugs.

A contractor or grantee that fails to carry out the requirements of the Drug-Free Workplace Act of 1988 can be penalized in one or more of the following ways:

  • Payments for contract or grant activities may be suspended.
  • Contract or grant may be suspended or terminated.
  • Contractor or grantee may be prohibited from receiving or participating in any future contracts or grants awarded by any federal agency for a specified period, not to exceed five years.

Compliance with the Act’s requirements is reviewed as part of normal federal contract and grant administration and auditing procedures.

The federal agency head is responsible for deciding whether a violation has occurred. If the contract or grant officer determines—in writing—that cause exists, an appropriate action shall be initiated and conducted in accordance with the Federal Acquisition Regulation and applicable agency procedures. For further information about compliance monitoring procedures, please contact the contract or grant officer in the agency from which the contract/grant was awarded.

Click here to download the full text of the regulations.

Source: US Department of Labor

Updated 10/7/08


The application deadline is October 21

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