Hidden Costs of Managing Your Own Drug & Alcohol Testing Program

An effective drug testing program promotes a safe, productive workplace in addition to a multitude of other benefits. Many companies decide to internally manage their drug testing program, but the hidden costs of doing so are high. We will walk through these hidden costs and why having a 3^rd party managing your drug and alcohol testing program can save you thousands of dollars every year.

Labor Costs

If you are managing your own Drug and Alcohol Testing Program, then you already know about the many tasks, relationships, and responsibilities that takes away from a person’s primary hired role. A company’s Human Resources Manager or Safety Manager does not need to worry about the day-to-day operations of handling their drug and alcohol testing program.

You will find that the top priorities for a Human Resources Manager is to maintaining the work structure, maintains staff through recruiting, interviewing, conducting exit reviews, training programs, conducting job evaluations, maintaining the employee benefit programs, ensuring legal compliance, and much more.

A Safety Manager is focused on ensuring the employees and managers are trained on OSHA safety standards, handling site inspections and safety concerns, managing and monitoring accident reports, and more.

Having a 3^rd party that specializes in making sure your drug testing program follows state and federal rules and regulations relieves the burden of the following tasks: managing multiple vendor relationship (such as collection sites, labs, and Medical Review Officers), vetting new vendors and collection sites, chasing paperwork and chain-of-custody forms, data entry and storing documents, managing the random testing employee pool, staying up-to-date on new state or federal guidelines (like how legal recreation or medical marijuana may affect you company’s testing policy), and more. If your company decides to keep the role in-house, we offer DER training to help train your staff of the rules, regulations, and what to expect in the drug testing process.

The hidden costs for the time and cost associated with employing at least 1 employee for this role would be around $15,000 – $70,000 annually. Similarly, the time and costs that management would spend managing employee(s) would be around $3,000 – $12,000 annually.

Technology Costs

When internally managing a company’s entire Drug and Alcohol Program, there are various technology costs that need to be taken into consideration. The time and cost to purchasing hardware, internet, and software, including a random number generating program, is required to collect and produce the needed data. These hidden costs can easily cost a company $2,000 – $5,000 annually.

Fines and Repercussions for Non-Compliance Costs

Drug testing laws and regulations vary by state, industry, federal contract status, and more, making the management of a drug testing program complex. It is critical that employers understand the multitude of laws and regulations that impact their drug testing program, or they could face compliance risks.

For example, employers should understand the drug screening regulations in the states in which they operate. Additionally, organizations that operate under a federal contract may be subject to even stricter requirements, including the need to ensure a drug-free workplace in accordance with the Drug Free Work Place Act of 1988.

Employers that are regulated by certain authorities such as the Federal Aviation Administration (FAA), Department of Health and Human Services (HHS) or the Department of Transportation (DOT) must understand the drug and alcohol testing requirements to which they must adhere, or they could face severe fines.

Falsifying Records Case Study:

The DOT requires employers to conduct a pre-employment drug test, obtain a three-year drug and alcohol violation history, and monitor employees on an ongoing basis. Motor carriers who fail to conduct this screening could be subject to fines. While a variety of factors are considered when fines are assessed, record-keeping fines begin at $500 per day and the fine for knowingly falsifying records is $5,000. However, monetary damages can extend far beyond those assessed by the FMCSA.

In May 2014, a trucking company’s owners were charged with, amongst other things, concealing driver’s positive drug test. One of the many counts of Indictments charged Rose Marie Diffenderfer with false statements or entries for willfully concealing and covering up a positive drug test result for one the company’s truck drivers. Each count of the Indictment carries a maximum statutory penalty of 5 years in prison and a fine of up to $250,000, according to a DOT report.

Additional Costs – if Drug Testing Program is managed poorly

Increase in Workers Compensation Claims:

Substance abuse in the workplace may also lead to accidents and injuries, which results in costly workers’ compensation claims. Statistics from the U.S. Department of Health and Human Services, National Institute on Drug Abuse show that substance abusers as much as double the cost of worker’s compensation claims for their employers.

Increase in Worker Turnover Costs:

Organizations with a high worker turnover will end up spending more on recruiting, hiring, and training, as they continually replace workers. The cost of replacing an employee can range from 25% to 200% of their annual compensation. Add to this cost the additional legal and financial liabilities attached to a dismissal that is associated with drug use or a workplace injury.

Decreased Employee Productivity:

It is no surprise that substance abuse decreases worker productivity. It could cost an organization thousands of wasted dollars each payroll to fully compensate workers who are not operating at expected capacity. In fact, according to Working Partners, National Conference Proceedings Report sponsored by the U.S. Department of Labor (DOL), Small Business Association (SBA) and Office of National Drug Control Policy (ONDCP), has shown that substance abusers are 33 percent less productive than their peers.

Increased Absenteeism:

Substance abusers are also more likely to be absent from work. A high rate of absenteeism costs employers more money paid for sick days and leaves employers with less overall output. According to the Working Partners, National Conference Proceedings Report, substance abusers are 2.5 times more likely to be absent for more than eight days a year than regular workers.

Don’t have a Drug Testing Program yet?

We hear all the time “Drug Testing Is Too Expensive”. Are you sure? We argue that alcohol and drug use among employees is expensive!  The potential effects from illicit drug use and alcohol abuse range from lost productivity, absenteeism, injuries, fatalities, theft and low employee morale, to an increase in health insurance premiums, increased legal liabilities, and more workers’ compensation costs. The National Institute on Drug Abuse (NIDA) and National Institute on Alcohol Abuse and Alcoholism (NIAAA) have calculated these factors cost U.S. employers more than $276 billion each year.

According to the Society for Human Resources Management (SHRM) in 2011, their survey found the number of employers reporting high workers’ compensation incidence rates fell by 50% after introducing drug testing, reduced insurance claims as much as 12%, first aid injury reports by 18%, accidents by 51%, and Experience Modification Rates (EMR) as much as 11.4%. For those organizations with absenteeism rates greater than 15%, implementing drug testing reduced absenteeism by about 50% overall. Additionally, 19% experienced an uptick in worker productivity.

Why CleanFleet

CleanFleet Drug and Alcohol Testing Program Management services are committed to assisting our clients increase profitability through testing for safety in the workplace while managing the costs.  We have a proven record and can work with companies and agencies with existing programs to seamlessly bring program management, compliance and costs under control.  We can also help set-up a new policy and testing program customized for your needs.