A special commission formed by the governor has found no evidence of bias in Maine’s unemployment claims dispute process, but reported Tuesday that severe understaffing has caused delays in benefit payments and, potentially, overpayments by employers.

The findings contradict claims by Gov. Paul LePage earlier this year that the system is biased and broken, but they support some employers’ complaints that “chronic and burdensome” process delays and some disallowance of evidence can lead to inconsistent fact-finding and rulings.

The commission’s report follows a high-profile controversy in which the governor was accused of upbraiding unemployment hearing officers during a meeting at the Blaine House.

That meeting and complaints about unemployment dispute hearings triggered an investigation by federal authorities, who were asked to determine whether LePage interfered with a process designed to be impartial.

The governor later formed the commission by executive order to determine whether there was evidence of bias by hearing officers who review disputes between employers and employees.

There is “no direct or intentional bias toward employers or employees” in the adjudication process, says the executive summary of the report. The panel attributed suggestions of bias to an “incomplete understanding of existing law” and the burden of proof that employers must show that an employee was fired for misconduct or quit voluntarily.

The commission also found that the unemployment claims system is “vastly understaffed,” causing delays that could prevent benefits from reaching laid-off workers or cause overpayments by employers.

LEPAGE CITES SUPPORT FOR CONCERNS

The commission was led by Daniel Wathen, a former Maine Supreme Judicial Court chief justice, and George Jabar, a Waterville lawyer and Kennebec County commissioner. Advocates for the unemployed and business interests also served on the panel.

LePage, in a written statement, focused on the deficiencies the panel found rather than the absence of bias. The administration said it plans to submit legislation to clarify the definition of employee misconduct and address staffing needs.

“It confirmed several of my concerns surrounding payments to people who are later found ineligible to receive benefits, problems associated with delayed receipt of benefits, lack of effective communication necessary to standardize decision-making, and inconsistent application of evidence standards relating to business records,” LePage said. “These are serious flaws in the system.”

Democrats suggested that the governor overstepped when he invited the hearing officers to the Blaine House in March.

House Democratic leader Seth Berry, D-Bowdoinham, said in a prepared statement that the “report confirms what we’ve known all along: the only bias or inappropriate behavior here was the governor’s intimidation of these neutral arbiters. Bullying is no way to govern.”

The hearing officers are part of a process that determines whether unemployed workers receive benefits or whether they have been fired for misconduct or quit their jobs voluntarily.

Employers have historically been sensitive to appeals that award benefits to workers. More unemployment claims drive up the rates that employers pay into a trust that funds the unemployment benefits program. The more unemployment claims or appeals rulings against an employer, the more that employer pays into the fund.

Defenders of the system say the unemployment claims process is designed to put the burden of proof on employers.

PATH TO FIX PROBLEMS, UNDERSTAFFING

Peter Gore, vice president for advocacy for the Maine State Chamber of Commerce, said the report may give policymakers a blueprint to fix problems with the process in the next legislative session.

Still, Gore said some in the business community maintain that the system is tilted toward employees. Workers who are denied claims will feel it favors businesses, Gore said. “It’s the nature of the system,” he said.

The commission found that hearing officers should allow some hearsay evidence by employers at the beginning of an appeal, and it called on the state to boost staffing to handle an increasing number of claims.

The understaffing and delays in the adjudication of claims put Maine’s hearing officers at the bottom of federal standards measuring timeliness of appeals, according to the commission. It recommended hiring six to 11 more front-end staffers and two or three more hearing officers.

The state’s eight officers together have handled an average of about 20 cases a week, making decisions on unemployment benefits that now average about $281 a week. According to federal data, Maine’s unemployment system handled 73,000 claims in 2007. That number increased to 155,000 between 2009 and 2010.

LEPAGE’S MEETING NOT ADDRESSED

The report did not address questions raised about the meeting earlier this year between LePage and the hearing officers.

Emails obtained by the Portland Press Herald through a Freedom of Access Act request showed that one of the hearing officers described the meeting as a “group scolding,” and added that the administration did not appreciate the importance of insulating quasi-judicial hearing officers from “public and political pressures.”

The public records request stemmed from a story in the Sun Journal of Lewiston on April 11 that said some of the eight to 10 hearing officers, who were not identified because they feared retribution, felt LePage had pressured them to decide more appeals in favor of employers.

In April, the Maine Sunday Telegram reviewed state and federal data and found little or no evidence to support the administration’s contention that the system is biased or that unemployment appeals decisions have been skewed against employers.

The federal records showed that employers consistently win most appeals, and that Maine’s hearing officers perform near the national average.

Allegations that LePage pressured the hearing officers prompted the Maine Unemployment Lawyers Association, whose members represent workers in unemployment cases, to ask the U.S. Department of Labor to investigate. The administration denied that the governor pressured the hearing officers, and said a visit by federal officials in August was a routine audit and a review of LePage’s concerns about “inconsistencies” and the overall quality of the unemployment compensation system.

The federal report may be released this week, said Beth Ashcroft, director of the Office of Program Evaluation and Government Accountability, the watchdog arm of the Legislature. Ashcroft said the Legislature’s Government Oversight Committee may have a chance to review those findings, as well as those by the special commission, when it convenes Thursday.

Steve Mistler can be contacted at 791-6345 or at:

smistler@pressherald.com

Twitter: @stevemistler