OSHA requirements are set by statute, standards and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at http://www.osha.gov.

August 27, 2001

Mr. Stanley A. Millan
Jones & Walker
201 St. Charles Avenue
New Orleans, Louisiana 70170-5100

Dear Mr. Millan:

Thank you for your February 6, 2001 letter to the Occupational Safety and Health Administration's (OSHA's) [Directorate of Enforcement Programs (DEP)]. This letter constitutes OSHA's interpretation only of the requirements discussed and may not be applicable to any statement not delineated within your original correspondence. You had a specific question regarding 29 Code of Federal Regulations §1975.5 and the definition of employer. We apologize for the delay in responding.

Question: Would a state hospital be excluded from the definition of employer in Section 3(5) of the Occupational Safety and Health Act (OSH Act) and the regulatory guidelines at 29 CFR §1975.5?

Response: The OSHA regulation at 29 CFR §1975.5 addresses states and political subdivisions thereof. Paragraph §1975.5(b) lists two tests for determining if an entity is a subdivision of a state:

(b) Tests. Any entity which has been (1) created directly by the State, so as to constitute a department or administrative arm of the government, or (2) administered by individuals who are controlled by public officials and responsible to such officials or to the general electorate, shall be deemed to be a "State or political subdivision thereof" under section 3(5) of the Act and, therefore, not within the definition of employer, and consequently, not subject to the Act as an employer.

 

 

Paragraph 1975.5(c) lists a set of factors, which you addressed in your letter, to determine whether an entity meets the above tests. Below are the factors most pertinent to your situation.

 

 

  1. Are the individuals who administer the entity [hospital service district] appointed by a public official or elected by the general electorate?

    You stated that in Louisiana the parish police juries are the counterparts of county commissions or the local governing bodies in other states. Police jurors are elected, and are authorized and empowered to create hospital service districts within their respective parishes. Under state law, the Board of Commissioners is appointed by the local governing body, and in turn, appoints the hospital administrator. The Commissioners are considered the governing authority of a hospital service district.
     
  2. What are the terms and conditions of the appointment? Who may dismiss such individuals and under what procedures?

    You indicated that Louisiana law stipulates the Board of Commissioners' terms and conditions of appointment; the -Commissioners are appointed for staggered terms, and may only be removed for cause and by two-thirds vote of the parish governing authority (the police jury). The hospital administrators' terms are set forth by contract, and the administrator may be dismissed with or with-out cause.
     
  3. What are the powers of the entity and are they usually characteristic of a government rather than a private instrumentality like the power of eminent domain?

    Your letter states that the powers of the hospital service district are government-like. A Louisiana statute provides that any hospital service district, "shall have the right and power of expro-priating property for the purpose of acquiring land for any purpose that it may find necessary in the operation of the hospital service district."
     
  4. How is the entity regarded under State and local law as well as under other Federal laws?

    You stated that under Louisiana law the parish hospital service district is regarded as a political subdivision of the State of Louisiana that is specifically created to own, organize, finance, bill, and administer a hospital to serve the health care needs of the parish or community. Under local law the parish hospital service district is considered an extension of the police jury.
     
  5. Is the entity exempt from State and local tax laws? Are the entity's bonds, if any, tax-exempt?

    You indicated that the hospital service district is exempted from state and local tax laws, and a Louisiana statute authorizes the governing body of the district (the Board of Commissioners) to call an election to issue bonds to acquire property to be used for hospital purposes or to propose a levy of a special tax for the purpose of constructing, maintaining and operating the hospital facilities. Under IRS regulations these bonds would be tax-exempt.
     
  6. As to the entity's employees, are they regarded like employees of other State and political subdivisions? How do employee fringe benefits, rights, obligations, and restrictions of the entity's employees compare to those of the employees of other state and local departments and agencies?

    You state that hospital employees are employees of the hospital service district, a political subdivision of the state. With regard to employee fringe benefits, a Louisiana law authorizes hospital service districts to establish and maintain pension and retirement systems, for the benefit of all appointed officials and employees of such districts. Another Louisiana law provides that the hospital service district may pay the full cost of coverage for life, health and accident insurance.
     

From what you have stated, it appears that the parish hospital service district is a political subdivision of the state under §1975.5(b)(2). Therefore, it is not an employer under Section 3(5) of the OSH Act.

Thank you for your interest in occupational safety and health. We hope you find this information helpful. OSHA requirements are set by statute, standards and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules, or if there is any additional information not presented in your letter. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at
http://www.osha.gov. If you have any further questions, please feel free to contact the [Office of General Industry Enforcement] at (202) 693-1850.

Sincerely,


Richard E. Fairfax, Director
[Directorate of Enforcement Programs]

[Corrected 6/2/2005]