Businesses are being warned that cutting costs on drug tests now, could mean much bigger expenses down the track.

Some firms are carrying out in-house drug tests on workers, using low-cost do-it-yourself kits.

Drug Detection Agency chief Kirk Hardy says it's risky to use them especially if a firm goes on to suspend or dismiss someone.

"Any result from one of those on site tests must be confirmed in a laboratory.

"We're not seeing that."

Kirk Hardy says if the results prove to be false, employers could face costly lawsuits.