How Do PHMSA Drug and Alcohol Testing Rules Apply to Pipeline Contractors?

Pipeline operators often rely on contractors for operations, maintenance and emergency response work. Under 49 CFR part 199, those contractor employees are covered employees in the same way as the operator's own staff, and the operator stays accountable for their testing. The FAQ on PHMSA covered employees covers who performs a covered function.

Contractors are covered employees. Section 199.3 defines a covered employee as a person who performs a covered function, including persons employed by operators, contractors engaged by operators, and persons employed by those contractors.

Who runs the program. An operator may provide by contract that the contractor carries out the drug testing, education and training required by part 199 (49 CFR 199.115) and the alcohol testing, training and education in subpart C (49 CFR 199.245). Two conditions apply. The operator remains responsible for compliance, and the contractor must allow access to its property and records by the operator, PHMSA and, where a state agency has jurisdiction, that state's representative (49 CFR 199.245(c)).

Test types. Contractor employees are subject to the same tests as operator employees, including pre-employment, random, reasonable cause, return-to-duty, follow-up and post-accident testing. An operator may not hire or contract for the use of a person as an employee unless that person passes a drug test or is covered by a conforming anti-drug program (49 CFR 199.105(a)).

Random rate for 2026. PHMSA set the minimum annual random drug testing rate at 50 percent for calendar year 2026 (90 FR 57129, December 9, 2025).

Records. Operators must keep records for set periods, such as 5 years for verified positive results and MIS data, 3 years for collection records and training records, and 1 year for negative results (49 CFR 199.117).

MIS reporting through DAMIS. Large operators, those with more than 50 covered employees, submit an annual MIS report by March 15 for the prior calendar year (49 CFR 199.119). PHMSA's notice at 89 FR 91887 explains how contractor data now flows. The same notice states that contractor employees are not counted when an operator determines whether it is a large or small operator for MIS reporting. Each contractor prepares a single DAMIS report covering its covered employees and tests, tracked by its business tax identification number. The primary operator lists the contractor, and the contractor's report becomes part of the operator's report once submitted. Operators no longer accept contractor reports in DAMIS and cannot view contractor data there, though they may request it from the contractor. Multi-factor login applies to DAMIS access. The FAQ on the DOT MIS report covers the form itself.

Practical steps. Operators should write testing duties into contractor agreements, audit contractor programs, and confirm each contractor's DAMIS submission before the March deadline.