(a) General. The definition of the term “employer” in section 3(5) of the Act excludes the United States and States and political subdivisions of a State:
(5) The term “employer” means a person engaged in a business affecting commerce who has employees, but does not include the United States or any State or political subdivision of a State.
The term “State” is defined as follows in section 3(7) of the Act:
(7) The term “State” includes a State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, and the Trust Territory of the Pacific Islands.
Since States, as defined in section 3(7) of the Act, and political subdivisions thereof are not regarded as employers under section 3(5) of the Act, they would not be covered as employers under the Act, except to the extent that section 18(c)(6), and the pertinent regulations thereunder, require as a condition of approval by the Secretary of Labor of a State plan that such plan:
(6) Contain[s] satisfactory assurances that such State will, to the extent permitted by its law, establish and maintain an effective and comprehensive occupational safety and health program applicable to all employees of public agencies of the State and its political subdivisions, which program is as effective as the standards contained in an approved plan.
(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.
(c) Factors for meeting the tests. Various factors will be taken into consideration in determining whether an entity meets the test discussed above. Some examples of these factors are:
Are the individuals who administer the entity appointed by a public official or elected by the general electorate?
What are the terms and conditions of the appointment?
Who may dismiss such individuals and under what procedures?
What is the financial source of the salary of these individuals?
Does the entity earn a profit? Are such profits treated as revenue?
How are the entity's functions financed? 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?
How is the entity regarded under State and local law as well as under other Federal laws?
Is the entity exempted from State and local tax laws?
Are the entity's bonds, if any, tax-exempt? As to the entity's employees, are they regarded like employees of other State and political subdivisions?
What is the financial source of the employee-payroll?
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?
In evaluating these factors, due regard will be given to whether any occupational safety and health program exists to protect the entity's employees.
(d) Weight of the factors. The above list of factors is not exhaustive and no factor, isolated from the particular facts of a case, is assigned any particular weight for the purpose of a determination by the Secretary of Labor as to whether a given entity is a “State or political subdivision of a State” and, as such, not subject to the Act as an “employer”. Each case must be viewed on its merits; and whether a single factor will be decisive, or whether the factors must be viewed in their relationship to each other as part of a sum total, also depends on the merits of each case.
(e) Examples. (1) The following types of entities would normally be regarded as not being employers under section 3(5) of the Act: the State Department of Labor and Industry; the State Highway and Motor Vehicle Department; State, county, and municipal law enforcement agencies as well as penal institutions; State, county, and municipal judicial bodies; State University Boards of Trustees; State, county, and municipal public school boards and commissions; and public libraries.
(2) Depending on the facts in the particular situation, the following types of entities would probably be excluded as employers under section 3(5) of the Act: harbor districts, irrigation districts, port authorities, bi-State authorities over bridges, highways, rivers, harbors, etc.; municipal transit entities; and State, county, and local hospitals and related institutions.
(3) The following examples are of entities which would normally not be regarded as a “State or political subdivision of a State”, but unusual factors to the contrary in a particular case may indicate otherwise: Public utility companies, merely regulated by State or local bodies; businesses, such as alcoholic beverage distributors, licensed under State or local law; other business entities which under agreement perform certain functions for the State, such as gasoline stations conducting automobile inspections for State and county governments.