According to a recent study by the Center for Disease Control (CDC), employers in the U.S. lost approximately $77 billion in 2010 due to the impaired productivity of hungover employees. The figure is $90 billion if you include absenteeism due to hangovers, and it balloons to $249 billion if you add in the additional costs of health care, car crashes, and deaths. Here’s what employers should know about dealing with the costly problems posed by hungover employees:
Under the Americans with Disabilities Act (ADA), alcoholism can, in some circumstances, qualify as a disability. As a result, employers need to be careful about taking an adverse action against an employee solely because he or she is an alcoholic. In some cases, it may also be appropriate to offer a reasonable accommodation to an employee struggling with addiction, such as a leave of absence to attend a treatment program.
On the other hand, the ADA is also clear that an employer may discipline an employee for legitimate workplace performance problems relating to the use of alcohol or other drugs. The ADA regulations provide that an employer:

May hold an employee who engages in the illegal use of drugs or who is an alcoholic to the same qualification standards for employment or job performance and behavior to which the entity holds its other employees, even if any unsatisfactory performance or behavior is related to the employee’s drug use or alcoholism.

29 C.F.R. § 1630.16(b)(4). Therefore, it is permissible for the employer to discipline or terminate an employee for any performance problems that occur in the workplace as a result of alcohol or drug use, so long as the discipline is not based on the employee’s status as an alcoholic or an addict alone.
Employers also need to be aware that certain states prohibit employers from disciplining or terminating an employee for his or her off-duty consumption of alcohol or other legal products, unless certain exceptions apply. For example, the Minnesota Lawful Consumable Products Act provides that an employer may not discipline an employee for off-duty consumption of alcohol unless the discipline is based on: (1) a bona fide occupational requirement and is reasonably related to the employment activities or responsibilities of the particular employee or group of employees; or (2) is necessary to avoid a conflict of interest or the appearance of a conflict of interest with any of the responsibilities owed by the employee to the employer. Minn. Stat. § 181.938.
Like the ADA, lawful product laws provide an additional reason for employers to focus not on the employee’s consumption of alcohol, but rather on the employee’s poor performance in the workplace, when addressing performance problems due to hangovers.
Takeaway: When dealing with hungover employees, employers should generally focus on the employee’s workplace performance problems – such as lack of productivity, absenteeism, inattentiveness, or errors in work product – without passing judgment on the employee’s off-duty behaviors or whether the employee has an addiction problem.