Definition - What does Third-Party Administrator mean?
A third-party administrator (TPA) is an outside company contracted to manage some or all of a company's drug and alcohol testing program. It is called third party because the company is the first party, the employee is the second party, and the outside administrator is the third party involved in the substance abuse testing. Third-party administrators specialize in managing substance abuse testing under federal law and can make management of the required programs easier for individual companies.
SureHire explains Third-Party Administrator
Third-party administrators are allowed under DOT rules to manage substance abuse programs for other companies but there are limits. For example, a TPA may not act as a designated employer representative (DER). There are no federal qualification rules for TPAs so companies must be very careful which TPA they hire, especially since the company is held responsible under 49 CFR Part 40 rules if the TPA makes a regulation error. Since the Safe Roads Act of 2012, there have also been penalties applied directly to TPAs for certain offenses but the employer still takes the brunt of the risk so caution is advisable.
