A. Negative dilute results are common when employees (perhaps concerned about passing the test) drink an excessive amount of fluids and produce a urine specimen that is so watery that it’s difficult to detect drugs. (Plenty of websites offer this solution as a way to pass a test.) A dilute result does not necessarily mean the employee is cheating; some employees do try to stay well hydrated.
Regarding observed urine collection, some states (including Ohio) permit it—by a same-gender collector, of course. So that is an option. Other steps to consider: Use oral fluids or hair tests, either initially or as the follow-on to a dilute result. Or, treat a second negative dilute result as a “refusal to test” (particularly if the person has notice of the retest and is told not to drink excessive fluids).