South Carolina Drug-Free Workplace Program – Workers’ Comp Ins. Discount

Introduction

South Carolina encourages drug-free workplaces with both financial incentives and legal protections. Employers that implement a certified program can earn a 5% workers’ comp premium discount under S.C. Code § 38-73-500, provided they maintain a written policy, notify employees, ensure confidentiality, and conduct random drug testing.

State law also strengthens employer defenses: § 41-35-120 disqualifies employees from unemployment benefits if they report to work under the influence or refuse a lawful drug test, and § 42-9-60 bars workers’ comp benefits for injuries caused by intoxication.

For state contracts or grants of $50,000 or more, the Drug-Free Workplace Act (§§ 44-107-10 et seq.) requires employers to certify they maintain a drug-free workplace, including employee education and corrective action after convictions.

Together, these rules promote safer workplaces, lower claims, and protect employers from costly disputes.

Below you’ll find a complete overview of program benefits, statutory requirements, testing rules, and the application process.

Benefits of South Carolina’s Drug-Free Workplace Program

5% Workers’ Comp Premium Discount - Employers that adopt and maintain a certified program under S.C. Code § 38-73-500 qualify for a 5% reduction in workers’ compensation premiums, directly lowering insurance costs.
Lower Claims and Costs - Drug-free programs reduce workplace accidents and substance-related claims, helping employers maintain safer and more productive worksites..
Employer Legal Protections - South Carolina law strengthens employer defenses: § 41-35-120 disqualifies employees from unemployment benefits if they report to work impaired or refuse testing. § 42-9-60 bars workers’ comp benefits for injuries caused by intoxication.
State Contract Compliance - The Drug-Free Workplace Act (§§ 44-107-10 et seq.) requires certification for contracts or grants of $50,000 or more, ensuring eligibility for public work opportunities.
Workplace Culture & Safety - Maintaining a drug-free environment demonstrates a commitment to employee safety, health, and professionalism while improving morale and productivity.

Program Requirements in South Carolina (At a Glance)

Here’s a quick comparison chart based on S.C. Code § 38-73-500 (Workers’ Comp Premium Credit), the South Carolina Drug-Free Workplace Act (§§ 44-107-10 et seq.), and related statutory protections in § 41-35-120 (unemployment) and § 42-9-60 (workers’ comp intoxication defense).

Category	South Carolina Requirements
Premium Credit	Amount: 5% workers’ comp premium discount. Certification: Annual recertification required with insurance carrier.
Statutory Authority	Workers’ Comp Premium Credit: S.C. Code § 38-73-500. State Contracts/Grants ≥ $50,000: Drug-Free Workplace Act, S.C. Code §§ 44-107-10 et seq. Unemployment Benefits Defense: § 41-35-120. Workers’ Comp Intoxication Defense: § 42-9-60.
Admin Agency	Premium Credit: Certified through workers’ comp insurance carriers. State Contracts/Grants: Administered by the South Carolina Budget & Control Board (procurement authority).
Employer Eligibility	Premium Credit: Any employer who establishes a certified program meeting § 38-73-500 requirements (must include random testing). State Contracts/Grants: Employers bidding on/holding contracts or grants ≥ $50,000 must certify compliance with the Drug-Free Workplace Act.
Notice & Posting	Premium Credit: Written drug-free workplace policy distributed to employees. Contracts/Grants: Policy statement must be included in contract compliance certifications.
Testing Requirements	Premium Credit: Random testing is required (§ 38-73-500). Other triggers (pre-employment, reasonable suspicion, post-accident, follow-up) are optional but recommended. Contracts/Grants: Must maintain a drug-free workplace; testing triggers not specifically enumerated but expected in policy.
Specimen / Panels	No mandated panel in statute. Most employers adopt the SAMHSA 5-panel (marijuana, cocaine, opiates, amphetamines, PCP), with optional expanded panels.
Medical Review Officer	MRO review not explicitly required by statute but considered best practice and often required by insurers.
Employee Education	Premium Credit: General employee education on policy, risks, and consequences is expected. Contracts/Grants: Required under § 44-107-30 (employee awareness program must be provided).
Supervisor Training	Not mandated in § 38-73-500, but recommended for reasonable suspicion documentation. Required annually under state contract/grant certification.
Employer Action	Under § 44-107-30, employers must take corrective action within 30 days of an employee’s workplace drug conviction (discipline or rehab).
Marijuana Notes	South Carolina has no medical or recreational marijuana law. Cannabis remains a Schedule I controlled substance; zero-tolerance policies are enforceable.

Disclaimer: This overview is provided for informational purposes only. Employers should review state requirements and consult with legal counsel or their insurer to ensure compliance.

Detailed Testing Requirements for South Carolina

South Carolina’s Drug-Free Workplace statutes do not mandate a single testing model but require employers seeking certification to maintain a written policy that clearly defines when and how testing will occur. Employers typically include the following allowable testing situations:

Pre-employment - Drug and/or alcohol testing after a conditional job offer, before final hire.
Random Testing – Required for certified programs under § 38-73-500. Employees must be chosen through a statistically valid, nondiscriminatory process.
Reasonable Suspicion – Based on specific, observable behaviors, documented in writing (appearance, speech, actions, odors).
Post-Accident – Required following workplace incidents or workers’ comp claims where substance use could have contributed.
Routine Fitness-for-Duty Testing – May be included as part of periodic or scheduled physicals, if applied uniformly.
Return-to-Duty and Follow-Up Testing – Conducted before reinstatement after a violation or treatment program, with follow-up testing at unannounced intervals.

Laboratories must be properly certified, and results must be reviewed by a licensed Medical Review Officer (MRO) before the employer takes action. Confidentiality must be maintained in accordance with South Carolina law.

How to Apply for Premium Credit in South Carolina

Develop Your Policy – Draft a written drug-free workplace policy that includes random testing, employee notification, confidentiality, and disciplinary procedures, in compliance with S.C. Code § 38-73-500.
Implement & Educate – Provide employees with a copy of the policy, deliver education and awareness training, and establish testing procedures with certified labs and an MRO.
Apply Through Your Insurer – Submit your completed policy and program documentation to your workers’ compensation insurance carrier. Carriers typically require a standardized form or checklist to certify your program.
Maintain & Renew – Re-certify annually with your insurer to keep the 5% premium discount, updating training records, testing procedures, and employee notices as required.

Why Choose ASAP Programs for Compliance?

Building and maintaining a compliant drug-free workplace program in South Carolina requires more than just a policy on paper. To qualify for the 5% workers’ comp premium discount under S.C. Code § 38-73-500, employers must demonstrate random testing, proper documentation, employee education, and annual insurer recertification.

ASAP Programs simplifies the process by providing:

Custom Policy Development – A written policy that satisfies South Carolina’s requirements and insurer guidelines.
Testing Coordination – Partnerships with certified labs and Medical Review Officers (MROs) to ensure valid and defensible testing.
Employee Communication – Templates and resources for employee notifications, education sessions, and compliance documentation.
Insurance Carrier Support – Assistance completing insurer checklists and applications to secure the 5% premium credit.
Annual Compliance Reviews – Ongoing support to keep your program current, defensible, and audit-ready.

Ready to qualify for South Carolina’s 5% workers’ comp discount?

Contact ASAP Programs today and let us help you implement a certified, compliant program.

Last updated: August 2025