Employees must always have to be tested for blood, urine, and hair so the company always knows that it is them. As the world runs via genetics by now, most people cannot see past anyones' genetic makeup, thus making these tests in the company mandatory.
"Valid" means that the person's sample matches their character profile. Note that just because the DNA matches, the person may not be the same. Vincent Freeman models this in the movie by borrowing the ladder of Jerome Morrow.
"Invalid" means that the person's sample does not match their character profile. Usually, it is often someone who is not registered within the company or someone with a genetic mutation (which also results in them not being registered in the company).
Easy Ways to tell if someone is "Invalid"Edit
There are other ways to tell if someone is invalid without doing a sample. First, the company looks for employees who are generally perfect in their genetic makeup, meaning that they don't have any major problems. For instance, someone may not be "valid" if they are wearing glasses, due to some mutation in their genes that prevents them seeing normally.