Background Checks
Manage your employment screening program easily and more efficiently with GoodHire’s award-winning advanced platform.
Access our full library of content to learn about hiring trends, screening compliance, and how GoodHire works.


Consequences Of A Failed Drug Test: Options For Employers

Illustration shows a woman giving a man a notice that he failed his employment drug test.

What happens when a job candidate or employee fails a drug test? It’s important for employers to understand their options and the legal next steps they should take after a failed drug test. Learn what to do when someone fails a pre-employment or employee drug test and how to ensure compliance with company policies and state and federal laws.

For many employers, navigating employee drug screening can be challenging. How they’re performed, what drugs are tested, reading drug test results—there are many steps and policies employers need to follow to ensure fair hiring practices. Moreover, employers must remain compliant with state and federal drug screening laws, as well as the company’s own written drug policy. In short? It’s a lot to keep up with.

But what happens when a candidate or employee fails a drug test? What are the consequences of a failed drug test, and what should hiring managers and employers do in these scenarios? 

Whether it’s a pre-employment drug test or a periodic (random) drug test for current employees, knowing all of the options and next steps is crucial for both employers and employees. That’s why GoodHire is breaking down what you need to know about failed drug tests and legal next steps.

How Often Do People Fail Drug Tests?

In 2019, the percentage of US drug test failures reached 4.5%—the highest rate in 16 years. Drug-testing experts say the COVID-19 pandemic has likely accelerated some substance abuse and is contributing to the current failed drug test rates.

Currently, marijuana is the most detected drug on employee drug tests. This is despite the growing legalization of medical and recreational marijuana in different states. 

In the Midwest, positivity rates for meth, cocaine, and marijuana have seen a dramatic increase, while positive results for heroin and opiates continue to fall.

Overall, positivity increases are happening across multiple industries, including retail trade, grantmaking, advocacy, personal services, and food service.

When it comes to failed drug tests, it’s also important to understand the context surrounding positive drug tests and the risk for false-positives. 

For example, if a candidate or employee tests positive for drugs or alcohol, you still can’t know how that drug became present in their system, when it was taken, or how much was taken. Further, if a candidate or employee is taking certain prescription or over-the-counter medications, they may fail a drug test. With failed drug tests on the rise, what do you need to know?

More Than 100,000 Employers Trust GoodHire For Better Background Checks

get started

Consequences Of Failed Pre-employment Drug Tests

If a job candidate fails a drug test, both you and the candidate need to take several different steps. However, because there are several different scenarios and nuances across each company, industry, and state, it can be challenging to know what to do next.

First, you should defer to your company’s written drug policy about handling a candidate’s failed drug test. Before hiring a Consumer Reporting Agency (CRA) like GoodHire to perform drug screening, employers should have their own drug policies drafted first and in place for at least 30 days. Companies should also consult their legal counsel to draft these policies.

Next, ensure you’re compliant with all federal and state pre-employment drug test laws. Federal laws like the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990 prohibit discrimination against candidates and employees based on a prior history of drug abuse or enrollment in rehabilitation programs. 

They also prohibit profiling certain groups of candidates for drug testing or singling them out because they may appear to be under the influence, as it may relate to a particular disability, illness, or medical condition.

Drug test laws vary from state-to-state and can often guide next steps (or consequences) for a candidate’s failed drug test. For example, in Alaska, employers can use a failed drug test as grounds for not hiring a candidate. 

However, that candidate has the right to explain a positive drug test within 10 days of the results. Like many other states, employers in Alaska can also refuse to hire a candidate if they don’t submit to a drug test. 

Consequences Of Failed Employee Drug Tests

Similar to failed pre-employment drug tests, there are several different steps employers need to take if a current employee fails a drug test. 

For example, some companies may have a zero-tolerance drug policy and may terminate an employee for failing a drug test. Other government-regulated workplaces must adhere to the Drug-free Workplace Act of 1988 if they receive any type of federal grant or federal contracts of $100,000 or more. 

The consequences of a failed drug test can vary from company-to-company and state-to-state based on an employer’s drug policy and state laws.

For example, in California, only those in positions of ‘sensitivity’ (meaning, employees who are in charge of their own safety or the safety of others) are authorized to be drug tested. If they fail a drug test, they may be referred for treatment, suspended, or removed from the job. However, the private sector and public employers (with 25 or more employees) must “reasonably accommodate” employees who want to seek drug or alcohol abuse treatment.

In other states, like Iowa, employees have the opportunity to explain or refute a failed drug test and request to be retested. Further, any records of positive drug tests must be removed from an employee’s personnel file when they leave the company if they successfully completed a treatment program. 

No matter the state, you should always err on the side of caution and follow the appropriate next steps in any instance of a failed drug test. 

Under the Fair Credit Reporting Act (FCRA), if employers decide not to hire a candidate or to terminate an employee on the basis of a positive drug screening result provided by a consumer reporting agency like GoodHire, employers must provide the candidate or employee with a pre- and final adverse action notice

These documents inform employees and candidates that their failed drug test resulted in a decision to dismiss or not hire them, respectively. As an employer, if you violate this or any other adverse action step under the FCRA, your company could face costly financial penalties and lawsuits, making the cost of a drug test with help from a professional service like GoodHire well worth it.

Know All Your Options With GoodHire’s Pre-Employment & Employee Drug Screening

GoodHire’s candidate and employee drug screenings are designed for more than just detecting drugs in a person’s system. Our drug screening process is designed to help you meet your company’s policy and drug-free work obligations, as well as help you stay compliant with applicable state and federal regulations. 

With more than 10 different drug-screening options, you can select the right drug test panels for your company’s industry and job positions, and feel confident knowing that all lab results are verified by Medical Review Officers (MROs) to ensure the highest possible accuracy.

And, as always, employers need to remain proactive about compliance by always consulting with your company’s legal counsel regarding any questions or concerns about drug testing for candidates and employees. 

Looking For Employment Drug Tests?

GoodHire makes it easy to get started.

Illustration showing GoodHires drug test option

The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.

About the Author

Ashley Blonquist is a former news journalist. She writes about GoodHire’s employment screening services and how employers use them to make informed hiring decisions.