My employer doesn't prohibit smoking. However, we have a yearly re-up on health insurance. As part of that process, you can voluntarily take a health screening. Basically, they test for risk factors, and for each test that you "pass," you get credits to use against your health insurance deductible. One of the risk factors is smoking, so they do test for nicotine, and a negative test is passing.
It's interesting and maybe just a bit troubling, but as my wife and I quit smoking about six years ago, no longer an issue for us. Now weight, on the other hand... <g>