Frequently Asked Questions

USDA grant and cooperative agreement recipients must maintain a drug-free workplace under 2 CFR Part 421, which gives regulatory effect to the governmentwide rule in 2 CFR Part 182 (2 CFR 421.10 and 421.20). The duty applies through a required term in each USDA award (2 CFR 421.400).

Policy statement. A recipient that is not an individual must publish a statement telling employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the workplace and stating the actions that will be taken for violations (2 CFR 182.205). Each employee engaged in the performance of the award must receive a copy of the statement (2 CFR 182.205 and 182.210).

Awareness program. The recipient must set up an ongoing drug-free awareness program that informs employees about the dangers of drug abuse in the workplace, the drug-free workplace policy, available counseling, rehabilitation and employee assistance programs, and the penalties for violations (2 CFR 182.215). The FAQ on drug-free workplace program components describes how these elements fit together.

Timing. If the performance period is 30 days or more, the policy and awareness program must be in place within 30 days after the award is made (2 CFR 182.220). The recipient must also identify the workplaces where work under the award is performed (2 CFR 182.230).

Convictions. After an employee reports a conviction for a drug violation in the workplace, the recipient must give written notice to the awarding official within 10 calendar days, including the employee's position title and the award numbers (2 CFR 182.225(a)). For USDA awards, that notice goes to each USDA agency with a current award to the recipient (2 CFR 421.225). Within 30 calendar days, the recipient must take appropriate personnel action consistent with the Rehabilitation Act of 1973, or require the employee to complete an approved drug abuse assistance or rehabilitation program (2 CFR 182.225(b)). The FAQ on legal requirements for drug testing in the workplace explains how these duties differ from testing rules.

Enforcement. The Secretary of Agriculture or a designee decides whether a recipient has violated the rule (2 CFR 421.500). Possible actions include suspension of payments, suspension or termination of the award, and debarment for up to five years (2 CFR 182.510).

A business that buys or sells fresh or frozen fruits and vegetables in wholesale quantities as a commission merchant, dealer or broker must hold a license under the Perishable Agricultural Commodities Act (PACA), which USDA administers through the Agricultural Marketing Service (7 U.S.C. 499a and 7 CFR 46.3).

Who counts as a dealer. A dealer is a person buying or selling produce in wholesale or jobbing quantities, which means a combined total of one ton (2,000 pounds) or more of produce in any day shipped, received or contracted (7 CFR 46.2(m) and 46.2(x)). Retailers are dealers when the invoice cost of their produce purchases exceeds $230,000 in a calendar year (7 CFR 46.2(m)(2)).

Fees. Commission merchants, brokers and dealers other than retailers and grocery wholesalers pay an annual license fee of $995 plus $600 for each branch or additional business facility, with total annual fees capped at $8,000. Retailers and grocery wholesalers pay a $100 administrative processing fee with an initial application (7 CFR 46.6).

Operating without a license. A firm that operates without a license may settle its liability if USDA finds the violation was due to inadvertence and not willful. The firm submits the application, pays the fees it would have paid while operating, and pays up to $250 more as determined by the Director (7 CFR 46.10).

The license itself. Each license bears a serial number, the names under which the firm is authorized to do business and the type of ownership (7 CFR 46.11).

Why it matters for employers. PACA licensing ties into who a produce business may hire. The FAQ on PACA employment restrictions covers the limits on employing people tied to sanctioned firms.

Other AMS produce programs. PACA is one of several AMS programs that reach produce firms. Recent examples include the news posts on AMS information collection for federal fruit marketing orders and AMS country of origin labeling information collection.

A PACA licensee may not employ, without USDA approval, a person whose license was revoked or is currently suspended, who was found to have committed a flagrant or repeated violation, or who has an unpaid reparation award issued within two years, or a person who is or has been responsibly connected with such a person (7 U.S.C. 499h(b)). The restriction is part of the Perishable Agricultural Commodities Act, which USDA's Agricultural Marketing Service administers.

Approval with a bond. The Secretary of Agriculture may approve the employment one year after the revocation or the finding of a flagrant or repeated violation, or at any time after nonpayment of a reparation award, if the licensee furnishes and maintains a surety bond. The bond assures that the licensee will conduct business under PACA and pay reparation awards for transactions in the four years after approval (7 U.S.C. 499h(b)).

Approval without a bond. The Secretary may approve employment without a surety bond two years after the effective date of the disciplinary order (7 U.S.C. 499h(b)). The Secretary may also raise or lower the bond amount based on the licensee's business, and approval ends automatically if the licensee does not provide a required increase.

Consequences. After 30 days' notice and the chance for a hearing, the Secretary may suspend or revoke the license of a licensee that keeps employing a restricted person. Upon a determination that a responsibly connected person has been unlawfully employed, the Secretary may extend that person's employment sanction for an additional one-year period (7 U.S.C. 499h(b)).

Who carries the duty. The restriction applies to the licensee that does the hiring. A licensee that continues the employment after the date in a USDA notice risks suspension or revocation of its own license (7 U.S.C. 499h(b)).

Licensing basics. The FAQ on PACA license requirements explains who must be licensed and the annual fees.