In spite of medical recommendations to the contrary, some employers are using virus testing, absent any evidence that an employee has been infected by a peer who has either AIDS or the virus. In virtually all employment situations, discriminating against persons who either have AIDS or test positive for the virus is illegal under employment discrimination laws. Under the law, the only reason for not hiring or for firing handicapped employees must be an inability to perform job tasks without posing a hazard to themselves or others. Employers must deal firmly with employees who refuse to work with AIDS-infected peers. Employee education is the best means to counter irrational fears. Discipline, including dismissal, should be the last resort for countering employee refusal to work with an AIDS-infected coworker. Virus testing places employers at risk of breaching confidentiality of medical information, being sued for actions based on false-positive tests, failing to take proper precautions in test procedures, and violating laws that prohibit such testing. 45 footnotes.