Objective Both alcohol drinking and second-hand smoke (SHS) exposure have shown a strong association with smoking behaviour. This study uses mediation analysis to clarify the process underlying the relationship between smoking prevalence and SHS exposure and the extent to which this relationship is mediated by alcohol use in the workplace. Method A total of 14,195 employees from 81 companies in China participated in this survey. Mediation analysis was used to establish the mediation effect of alcohol drinking. Structural equation modelling (SEM) was used to evaluate the role of alcohol drinking when a smoke-free (SF) workplace policy was imposed. Results For males, approximately 6.3% of the effects on SHS exposure were mediated through the channel of alcohol use. For females, this channel mediated 14.1% of the total effects. SF policy was negatively associated with smoking prevalence and SHS exposure. The indirect effect of the SF policy on reducing SHS exposure by controlling smoking behaviour was significant. For smokers, worksite smoking bans were negatively associated with the smoking amount and drinking behaviour, and the indirect effect of this policy on promoting smokers' intention to quit by reducing the smoking amount and controlling drinking behaviour was significant. Conclusion This study confirmed that alcohol drinking is among the channels that mediate the association between smoking prevalence and SHS exposure in workplaces. Our results also find a spillover effect of SF workplace policy and call for effective interventions for alcohol use, which may influence the outcomes of SF policy implementation.