Interesting thread (I have this problem also) but it seems everyone including the O.P missed an important question.
The International Paruresis Association takes no formal position on the legality or privacy aspects of urine drug testing. It states that on the website.
The question is: What law sais you have to submit to an 'observed' drug test ?
If you don't know the awnser, just like I don't, please don't reply with "they need to make sure no one cheats" as proof of the existance of such a law that allows unwanted viewing of a persons private parts against there will. I can see that reply coming already a mile away.
Anyone know about the legality of all this ?