Employee drug testing: implications for policy

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Michael Webb

Barrister and Solicitor


The Minister of Health startled many people when she issued a statement saying that regular drug users have twice the rate of absenteeism, four times the rate of accidents, and are three times more likely to be late for work, than those who do not use drugs (Shipley 1994). The Minister's statement was based on a comparative survey of drug abuse in the workplace by the Managing Scientist of the Drugs and Toxicology Group of the Institute of Environmental Science and Research (ESR) (Nolan 1994).

The muted response to the Minister's statement has belied the activity behind the scenes, as various groups have begun to grapple with the meaning of the ESR survey. On the one hand, it has sparked many employer's interest in the prospect of employee drug testing; on the other hand, labour organisations have mobilised resistance against any proposals to screen workers for drug use. The Privacy Commissioner even took the unusual step of commissioning an overseas consultant to critique the ESR survey, and invited him to New Zealand to lecture on the topic (Oscapella 1995). The most recent development has been legal action filed in the Employment Court over a proposal by Auckland-based Mercury Energy to introduce employee drug testing. The result of this legal challenge should be known by early 1996.
In this paper, I want to tease out the policy implications of employment substance abuse testing (ESAT). After locating ESAT within its technological context and reviewing the evidence that substance use affects workplace performance, the magnitude of the problem in this country and its associated costs will be canvassed. Discussion then turns to what might be described as the politics of ESAT. It will be argued that while ESAT is a morally neutral technology, it has the potential to corrode traditional understandings of the employer-employee relationship and to import an unhelpful ideological component into the New Zealand industrial relations scene. In the final part of the paper, policies to help reduce the problem of substance-impaired workers will be examined for their potential application to New Zealand.


ESAT was first practiced on a significant scale in the 1960s and early 1970s by the United States Department of Defence, when military personnel returning from Vietnam were screened for drug use. Technological advances in the methodology of drug testing saw screening programmes become more widely accepted during the 1980s, not only in the public sector but also the private. By 1986, for example, an estimated 25% of the largest 500 companies in America tested for illegal drug use amongst their employees (Smith 1988). According to up-to-the-minute reports available on the Internet, the range of firms now engaging in some form of ESAT include major players like 3M, AT&T, Boeing, Dow Chemicals, Ford Motors, Hewlett Packard, IBM, Kodak, McDonnell Douglas, Mobil Oil, Sony, Xerox, and Unisys. Following on from the American developments, the practice of ESAT has also migrated to countries such as Canada and Australia, where the incidence of testing programmes is on the increase (Macdonald and Dooley 1991; Privacy Committee of New South Wales 1992). As the practice has spread, the debate over the pros and cons of drug testing has advanced sufficiently that it is now possible to pace the proposed introduction of ESAT to New Zealand into a meaningful context.

What is ESAT?

ESAT is a process of detecting levels of drug residues in an employee's body. This is done by collecting a sample from the employee – either blood, urine, hair, saliva, or breath – which is scientifically tested to determine whether one or more of the nominated substances is present. The most common forms of ESAT are the breathalyser, which uses samples of breath to detect the presence of alcohol, and urinalysis, which uses samples of urine to test for other substances. Testing will generally be used in one or more of the following circumstances: pre-employment; probable cause (e.g. post-accident); reasonable suspicion (e.g. where an employee shows obvious signs of intoxication); periodic; random; follow-up (e.g. where an employee returns from rehabilitation); redeployment (e.g. where an employee is transferred or promoted); or voluntary (see Mørland 1994).

To confirm that a particular substance has been ingested, laboratories will typically use two types of testing: screening and confirmatory. A low-cost screening procedure such as the Enzyme Multiplied Immunoassay Technique (EMIT) is used to give an initial negative or tentative positive result. The more expensive confirmatory testing is reserved for those samples which yield a tentative positive result from this first screening process. Several confirmatory tests are available which vary in their cost, accuracy, selectivity and sensitivity. Gas chromatography with a mass spectrometry detector (GC/MS) is the most accurate, sensitive and selective procedure which provides forensically defensible evidence of the presence and levels of the substances being tested for. GC/MS is also the most costly confirmatory test available.
Before leaving these technical details, it is important to consider the utility of the test results. The only tests which correlate closely with actual levels of impairment are breathalyser and blood tests for alcohol (Hawkes and Chiang 1986). By contrast, the most widely used testing method, urinalysis, can be used only to determine the presence of particular drug metabolites, and provides no measure on impairment, habituation or addiction. Even the successful detection of drugs via urinalysis is conditional upon several factors, such as the type and amount of the drug taken, the time at which it was taken, the amount of water consumed before the urine specimen was collected, and the individual's metabolic rate (Manno 1986). False positive and false negative results must also be guarded against in the case of urinalysis. These limitations have led many critics to question the effectiveness of any ESAT programme which relies upon urinalysis as its method of choice (for example, Macdonald et al. 1993).

The Effects of Substance Use on Workplace Performance

Accepting that substance use may be detected by various testing procedures, why should employers be interested in such results? The answer is that controlled research has demonstrated that basic psychomotor and cognitive skills relevant to job performance are impaired by most drugs (Nicholson and Ward, 1984; Addiction Research Foundation 1987), including over-the-counter and prescription drugs (Klein 1972).

It must be said that there is still a lack of systematic research which has calibrated the relationship between employee drug use and on-the-job performance, or indeed the relationship between off-the-job drug use and work-related problems such as low productivity or industrial accidents (see Henriksson 1991). Early studies have indicated that drug use and job performance may be linked in a meaningful way (Blank and Fenton 1989, Normand et al. 1990, etc.). For example, alcohol is implicated in 20% of industrial accidents in the United Kingdom (Powell 1990, cf. Hingson et al. 1985). Similarly, a recent study published in the Journal of the American Medical Association has shown that users of marijuana and cocaine present higher relative risks for accidents, injuries, disciplinary action and termination than non-users (Zwerling et al. 1990).
A multi-phased longitudinal study of applicants for the United States Postal Service represents the state of the art (Peat 1995). As part of the study, 5,465 job applicants supplied urine specimens to test for the presence of drugs. Overall, 9% of the 4,396 applicants eventually hired returned positive test results: approximately two-thirds for marijuana, one-quarter for cocaine, and one-tenth for other drugs. Over the next 303 years several variables characterising employment were monitored, including absenteeism, staff turnover, referrals to an Employee Assistance Programme (EAP), medical claims, and disciplinary actions. When corrected for other demographic factors, the study's comparison data produced some interesting results. For example, the mean absenteeism rate for the drug-positive group was 11.4% versus just 6.75% for the drug-negative group. Similarly, the drug-positive group, had a 77% higher rate of involuntary turnover compared with the drug-negative group, and their respective odds of being disciplined were 2.4 times higher. The study also revealed that 14.4% of the drug-positive workers were referred to an EAP as against only 2.7% of the drug-negative workers. Finally, the median number of medical claims filed by the drug-positive group was 51% higher, and was for an 83% higher median dollar amount, than the respective figures for the drug-negative group.

The Magnitude of the Problem

Given the concern over the linkages between substance use and workplace performance, it is important that New Zealand policy makers have an accurate sense of the magnitude of the problem in this country. The extent of alcohol and drug use by employees worldwide is not well known, however, and New Zealand is no exception in this regard. Nevertheless, a number of studies have been carried out to establish the levels of substance use in New Zealand, and it can fairly safely be assumed that the extent of alcohol and drug problems in the workplace are likely to reflect those in the general population. (Before any certainty is attached to such findings, though, sophisticated, controlled studies are needed: see Solowij et al. 1991).

The most comprehensive survey of drug use to date is a 1990 household survey of over 5,000 people aged 15-45 years old, which was commissioned by the Department of Health (Black and Casswell 1993). The study showed that while over 70% of self-reported drug users were employed, drug use in the workplace still affected only a minority of employees. The survey revealed that 10% of full-time employees had used drugs more than five times last month. The researchers found that the frequency of use was likely to be significantly higher for male employees in the 15-24 age group, and higher still in certain "blue-collar" occupational groups. The rate for heavy drug users could thus be as high as around 8% for some workplaces, depending upon the local demographics and culture. The majority of users reported that they did not use drugs at work. For example, 89% of cannabis users said they never smoked on-the-job. Note, finally, that despite the concern over illicit drugs, alcohol is still considered to be the most common problem substance used by adult New Zealand employees.
What are we to draw from these statistics? At one level, there is reassurance to be had from this data. It indicates that, generally speaking, drug use levels in New Zealand are similar to those found in Australia and, in some respects at least, the United States (Nolan 1994). At another level, these statistics are sobering when one considers their fiscal implications. For instance, estimated production losses attributable to alcohol for one year in an Australian study put the total at $2,049.3 million, with the abuse of illicit drugs contributing further production losses of an estimated $431.9 million (Collins and Lapsely 1991). A number of American studies have also concluded that employee substance use directly results in reduced revenue for employers and increased operating costs in the form of measurable performance deficiencies (for example, Lodge 1987). Nolan (1994) has extrapolated the available United States and Australian data to derive a rough estimate of the annual cost of substance abuse in New Zealand of $1.5 billion. This figure is broadly comparable with earlier estimates by Chetwynd and Rayner (1985).
The question still remains whether ESAT programmes are effective in reducing this level of cost to the nation. Despite some scholars questioning the link between ESAT and such indicators as a reduction in workplace accidents (Feinauer 1990), evidence is beginning to emerge which suggest that a link does exist. Thus, the authors of the United States Postal Study calculated that the savings over a 10 year period in terms of reduced absenteeism and turnover alone would total approximately US$105 million, or a saving of around US$19,000 for every drug-positive applicant who is not hired. These savings would have been even greater, the researchers noted, if the estimated savings in terms of EAPs and medical claims had been factored into the equation (Peat 1995). Similarly, researchers have described a cost-benefit analysis for the Utah Power and Light Company in which the company's ESAT programme was found to provide a potential yearly cost savings of US$660,000 if the differences in job performance measures between drug users and non-users could be eliminated (Crouch et al. 1989).
Several corporations have also publicly stated that their ESAT programmes yield significant economic savings. For instance, Upjohn's ESAT programme reportedly cost the company around US$476,000 to run in 1993, but returned the company gross savings of more than US$1 million, including savings of US$799,000 in reduced absenteeism and staff turnover alone. In other words, the company realised a net saving of approximately $560,000 from its programme overall for that year (Delancey 1994).
In the New Zealand setting, Nolan (1994:24) cites a confidential report to ESR in March 1994 as evidence of the effectiveness of ESAT programmes in reducing the costs imposed by employee drug use:

In 1992, A New Zealand organisation with around 2000 employees commenced pre-employment and random urinalysis testing for drug use. All employees are tested at least once a year. This programme was one number of well-publicised measures to reduce substance abuse, including supervisor training, education and counselling for drug abusers. Prior to these programmes, the annual average number of reported drug related incidents was 55 for the years 1985 to 1991. These incidents resulted in an average of 12 dismissals of staff per year The cost was considerable. Since the introduction of the programmes, the number of drug related incidents has decreased to 10 per year (an 81% reduction), with the number of dismissals averaging 3 per year (a 75% reduction). The primary cause of these decreased was considered to be the introduction of the urinalysis and education programmes.

Needless to say, if these savings are replicated on a wider-scale as more employers introduce ESAT protocols, then the annual dollar saving to New Zealand is likely to be very significant indeed.


The simple economics of ESAT seem to recommend its introduction. That, and the potential for ESAT to improve the level of safety in the workplace, are the strongest justifications that can be marshalled in favour of its implementation. But what of the other reasons that might underpin the calls to introduce ESAT? When those reasons are brought to light, how does ESAT measure up on a political and ethical yardstick?

A Convenient Theatre for the War on Drugs

A reason sometimes given for the introduction of ESAT is to help reduce the use of illicit drugs in society at large. Given that the majority of the adult population is employed, drug-testing programmes that are located on job sites effectively have a captive audience of a large proportion of the drug-using population. Literature put out by the United States Office of National Drug Control Policy (1990:1) is quite explicit about this, noting that because most people have jobs, the workplace may be the most strategic point in society from which to combat the scourge of drugs.

As Gust and Walsh (1989:4) explain, "The social and fiscal contingencies tied to employment provide the basis for potentially powerful techniques to modify behaviour. Mechanisms are in place for observing performance, for setting standards for performance, and for establishing sanctions to enforce those standards." Therefore, according to Jacobs and Zimmer (1991), drug testing in the workplaces, at its core, a punitive system of social control which is engaged for the wider interests of the State. If this is true, it is a moot point whether it is legitimate for public interests to be pursued by proxy through what is essentially a private contractual relationship between an employer and an employee.

The Moral Subtext to ESAT

Other critics see even darker demons in the plans to introduce ESAT on widespread basis. According to Wisotsky (1987:767), for example, "Drug testing programs have a lot more to do with defending anti-drug cultural norms by espousing homilies than with serious analysis of employee productivity". Two of ESAT's most trenchant critics, O'Malley and Mugford (1992), go further to charge that employee drug testing is a Trojan horse for wider social control that is more about a moral crusade than it is about minimising safety risks and improving workplace productivity. The authors make the observation that:

[D]rug use becomes a terrain in which the representatives of "Middle America" can wrestle with those forces to which they are opposed, attempting all the while to claim the right to speak "for America" – but an America conceived in their own image. At the core of this struggle we see a search for morally pure urine specimens, a search not unlike that for the Holy Grail, both centering on a search for powerfully valued signs of the ultimate good (p. 138).

O'Malley and Mugford seem to assert that there is a morality lodged within ESAT programmes, as though the technology of urinalysis somehow has innate moral meaning. The better view is that urinalysis, although a morally neutral technology, can, like any other technology, be used to further particular moral ends.

In this context, it is perhaps more meaningful to observe that while substance use may be correlated with job performance indicators, as Gust and Walsh (1989) point out, this tells us very little about mechanisms which determine these relationships. From a policy maker's perspective it may not make much difference. ESAT results are useful if individuals who use drugs cost employers money, because it will make financial sense to reduce the number of users in the workforce. But, from a scientific perspective, it is important to search for mechanisms which underlie differences in behaviour between drug users and non-users. This is especially true if drug use measures come to be used as "markers" for other characteristics which are seen to correlate with adverse or unproductive job performance. Returning a drug-positive test result may in this situation attach a powerful stigma to a worker, one which gives rise to discrimination and, perhaps, termination altogether. This is where we must be particularly vigilant against moral judgments infecting the career decisions made by employers about workers who return a drug-positive test.

Corroding the Traditional Employer-Employee Relationship

Other commentators have identified in ESAT programmes a fundamental issue of management style. Raskin (1994) contends that testing encourages a management style that implies employees cannot be trusted on their own to act legally or follow company policies, and that they must be monitored to ensure compliance. Of itself, this could be said to corrode the traditional atmosphere of mutual confidence and trust which the Courts have held to be central to the employer-employee relationship.

The traditional understanding of this relationship could also be undermined by the possibility that employers are placed in a greater power imbalance, as well as a conflict of interest, if they obtain additional information from ESAT results about prospective or existing employees. The obvious example would be information on the pregnancy status of female workers or job applicants. This prospect of an expanded range of information from employee drug tests being made available to employers also suggests a "thin end of the wedge" concern, notably that ESAT as a means of improving worker health could lead to a range of more obviously discriminatory testing. Examples here might be tests for HIV status or even more broad-ranging from or genetic-screening. Either prospect sets off loud alarm bells for civil libertarians.


If we are prepared to accept the possible ideological baggage and ethical difficulties that might be imported along with ESAT, and that is a big "if", where do we go from there? The largest New Zealand provider of ESAT analysis, ESR, offers its own guidelines to help employers implement drug testing programmes in their workplaces. Employers could also usefully consult a number of publications that have recently sought to standardise ESAT procedures on an internationally-agreed basis (for example, International Labour Office 1994a; International Labour Office 1994b, pp128-140). A mixture of these two sources should arm employers with sufficient information to be able to establish a stand-alone ESAT programme.

Limiting The Reach of ESAT Programmes

Until the legality of various ESAT protocols has been authoritatively determined, though, employers would be wise to circumscribe the reach of any proposed testing programme. A lead may perhaps be taken from a 1992 report by the New South Wales Privacy Committee, which recommended that workplace drug testing take place only where: (a) a person's impairment would pose a substantial and demonstrable safety risk; (b) there was reasonable cause to suspect impairment; and (c), the proposed method of testing was capable of identifying the presence of drugs at concentrations sufficient to cause impairment. The Committee concluded that testing in other circumstances should be prohibited by legislation, which should also set procedural standards for authorised testing to protect employees' privacy interests (Privacy Committee of New South Wales 1992, Gaudin 1994). It may be considered that such a limited model for the introduction of ESAT to New Zealand was also desirable.

In view of the controversial nature of drug screening and the opposition it engenders, a specially convened World Health Organisation Expert Committee considered it preferable to develop drug-related health promotion initiatives that do not make use of ESAT at all. It conceded that testing for alcohol-induced impairment in certain occupational settings with implications for public safety (such as transport workers, heavy machinery operators, surgeons, etc.) may be less controversial, but even here it thought such testing was best placed in an appropriate health promotion context (WHO Expert Committee 1993).
To expand upon this last observation, it is axiomatic that effective policy approaches to complex issues require coordinated, comprehensive programmes that are regularly evaluated in order to monitor their effectiveness. Quick "technological fix" solutions do not ordinarily work. If ESAT is to be introduced on a wide scale in New Zealand, then it is suggested that it should from only one part of a comprehensive workplace health promotion plan.

The Need for an Integrated Approach

The need for an integrated approach is recommended by the fact that a wide range of biological, social, environmental and personal factors may contribute to substance use problems in the workplace. Although the exact nature of the relationship is still unclear, there is mounting empirical evidence that adverse psychosocial employment conditions are linked to the emergence of alcohol and drug related problems (Shehadeh and Shain 1990). For instance, with respect to groups such as deep sea fishermen and naval personnel, factors such as long absences away from home and family, loneliness, boredom, stress, and a culture which accepts and perhaps encourages heavy drinking or recreational drug taking, may all play a significant role in the development of substance use. Logically, any policy response which does not address these motivations for on-the-job alcohol and drug use will be doomed to failure.

There is evidence to suggest that EAPs and health promotion programmes (which may or many not use ESAT) offer a superior alternative to employee drug testing alone, in terms of reducing the number of substance-related problems in the workplace (for example, Jerrel and Rightmyer 1982). Practitioners are increasingly beginning to reflect this realisation in their writing. Coshan (1994), for instance, argues that if EAPs are to be effective, they must address the wide range of personal issue which can affect employees' well-being and productivity. Moreover, employers and employees must acknowledge that the workplace is part of the problem and part of the solution. Assistance should be directed at providing tools and resources for those who request them, she concludes, but satisfactory performance must always remain the responsibility of the employee.
There is great scope here for creative thinking about the best ways to target those most in need of education, support and treatment (see WHO Expert Committee 1993). A French strategy which could be adopted for this purpose is the designation of certain employees in medium to large-sized organisations as "prevention agents" (Legros and Rivière 1988). Under this scheme, agents would be trained to ensure that they have a general knowledge of substance-related problems, including how to recognise workers suffering from such problems; basic psychological information to enable them to deal effectively with such workers; and the ability to determine the most advantageous method to prevent such problems recurring. The means of implementing an effective prevention strategy would include such things as specialist lectures and group discussions, and referral paths to non-stigmatised EAPs.
In order to reach those workers which fall outside the formal labour market net, special strategies could also be designed to utilise available channels such as the family, non-governmental organisations and religious groups (Doogan 1990). Community-based services could also be developed to provide support to small or rural businesses, or the businesses could perhaps pool resources to provide a collective EAP. The possibilities are limited only by the imagination of the policy makers, and winning the minds of those who will be responsible for funding such initiatives to convince them that they will pay their way. The overall objective should be to create a dynamic approach to the policy problem of influencing societal attitudes towards alcohol and drug use, particularly in the workplace.


ESAT has not yet become widespread in New Zealand. At present, only the Defence Forces and a small number of private companies engage in testing on a regular basis. The legality of some specific proposals to introduce random or pre-employment testing is currently at issue before the Employment Court and the Privacy Commissioner. Assuming that the threshold test of its legality will be overcome, then while ESAT is still nascent in this country, policy makers have an opportunity to develop a coherent response to the whole issue of alcohol and drug used in the workplace. This would ideally form part of the Government's planned national strategy on drug and alcohol abuse, which is due for release by December 1995.

While the lack of a systematic base of empirical data cautions against overstating the findings of existing studies, and while ESAT may be seen to present problems from a political and ethical perspective, there appears to be evidence enough that it makes hard-nosed economic sense to test workers for substance use. The resulting battle between what might simplistically be described as the competing values of individual rights and economics, is one which has been fought in a number of contexts in society with differing outcomes. It is difficult to predict with certainty how the balance will be struck in relation to ESAT. One thing is certain, however. If we are to develop a rational policy on bringing employee drug testing to this country, then as the Minister of Health has stated: we must engage in an open, well-informed and intelligent debate (Shipley 1994). This article has been a modest first step towards advancing that debate.


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