Many federal contractors and all federal grantees are required by law to establish and maintain a drug-free workplace policy. The most important piece of legislation regulating federal contractors and grantees is the Drug-free Workplace Act of 1988. Under the act, a drug-free workplace policy is required for: Any organization that receives a federal contract of $100,000 or more Any organizations receiving a federal grant of any size At a minimum, such organizations must: Prepare and distribute a formal drug-free workplace policy statement. This statement should clearly prohibit the manufacture, use, and distribution of controlled substances in the workplace and spell out the specific consequences of violating this policy. Establish a drug-free awareness program. This program should inform employees of the dangers of workplace substance use; review the requirements of the organization's drug-free workplace policy; and offer information about any counseling, rehabilitation, or employee assistance programs (EAPs) that may be available. Ensure that all employees working on the federal contract understand their personal reporting obligations. Under the terms of the Drug-Free Workplace Act, an employee must notify the employer within five calendar days if he or she is convicted of a criminal drug violation. Notify the federal contracting agency of any covered violation. Under the terms of the Drug-free Workplace Act, the employer has 10 days to report that a covered employee has been convicted of criminal drug violation. Take direct action against an employee convicted of a workplace drug violation. This action may involve imposing a penalty or requiring the offender to participate in an appropriate rehabilitation or counseling program. Maintain an ongoing good faith effort to meet all the requirements of the Drug-free Workplace Act throughout the life of the contract. Covered organizations must demonstrate their intentions and actions toward maintaining a drug-free workplace. Their failure to comply with terms of the Drug-Free Workplace Act may result in a variety of penalties, including suspension or termination of their grants/contracts and being prohibited from applying for future government funding.