I just had to deal with a similar situation, and in my experience, the retest wasn't observed. YMMV, however.

I'm sure somebody on here will correct me if my logic is faulty, but it seems to me that even if the sample is diluted, you're still dealing with a presumption of innocence and a corresponding right of privacy. Even if they do try to observe it, you can still sub if you just pitch a fit about being pee-shy and demand some privacy. When ours came back diluted, we decided to sub with Quick Fix 5.7 and it worked like a charm. I'd definitely recommend that route.
SWIZ420 Reviewed by SWIZ420 on . Re-Test, Will it be observed? MRO says sample diluted. I took a UA a few days ago, got a call the next business day, MRO says the sample is diluted and the test was canceled. The UA was taken with an Escreen Ecup machine, although I dont remember the collector ever putting the Ecup in the machine, only packaging to be shipped to the lab. Got a call from the employers asking me to retake the test. My question is, When retaking a test, should the employer let you know if it will be observed? Rating: 5