AUGUSTA, Maine — A commission created by Gov. Paul LePage to investigate the state’s unemployment claims process says there is no bias in the system but that severe understaffing and bad communication are making the system inefficient.

The Unemployment Reform Blue Ribbon Commission was assembled in May after reports surfaced that LePage had chastised claims analysts to decide unemployment cases in favor of businesses rather than employees.

LePage denied making the comments, saying that he only had “reminded the staff that they must follow the law, that they should not weigh their decision either for or against employers or employees, and that both sides must be treated equally under the law,” according to a spokesman.

A U.S. Department of Labor audit followed, although the LePage administration said that was caused by complaints of bias, not by allegations the governor had interfered in what was meant to be an apolitical program. An investigation by the Sun Journal found that complaints came from both sides.

The commission interviewed several current and former Department of Labor employees, reviewed a random sample of unemployment case files, and held a public hearing to investigate the claims system.

In its report, the group said it had “found no direct or intentional bias evidenced toward employers or employees in the adjudication process for unemployment claims” and that suggestions of bias “appear to be based on an incomplete understanding of existing law and the statutory burden of proof” the system places on both employers and employees.

While the commission said bias is not an issue, other problems plaguing the unemployment claims process are creating inefficiencies and uncertainty, the report states.

First, the department is “vastly understaffed,” causing delays in benefits, preventable overpayments and inconsistent factual findings between the first two levels of a three-tiered hearing system.

Unemployment claims more than doubled after the recession from 73,000 initial claims in 2007 to more than 155,000 in 2009 and 2010. No attendant increase in staffing took place in that period, the commission said, and high claims volumes are predicted to continue “for the foreseeable future.”

Delays in benefits are a self-explanatory function of understaffing, but the commission also noted that overpayments took place because of the immense backlog. A claimant may initially be found eligible for benefits only to be found ineligible on appeal. But delays in the process mean payments often are made before ineligibility is declared.

The department is currently awaiting $47 million in repayment from claimants who were deemed ineligible for benefits.

“A significant but undetermined portion of that sum is undoubtedly attributable to the delay that has existed in the system,” the report states.

The group also reported a lack of standardization caused by ineffective communication among the three levels of the adjudication process.

The commission recommended increased staffing and better communication practices, as well as more public education so that employers and employees would know what kinds of testimony may be considered by hearings officers.

On the later point, the commission found that certain business records were being dismissed as hearsay despite being “universally admitted” by courts, administrative agencies and arbitrators as long as the records are maintained in the regular and orderly course of business.

LePage said in a prepared statement that he was pleased with the commission’s findings and that its report confirmed several of his concerns.

“Employers and employees need to have confidence in the unemployment system,” LePage wrote. “Delay, inconsistent and reversed decisions, and inefficient systems hurt everyone and hurt our business climate. By improving this system we are making changes that will benefit all Mainers and save money for both taxpayers and employers.”

The Maine State Employees Union, which represents workers who handle unemployment claims, urged LePage to follow the recommendations in the report, especially with regard to staffing.

“As the public hearing showed, the most serious problems facing the system are a lack of staffing and resources. Given the barriers erected by the LePage administration’s failure to fund state government, our members have worked hard to deliver the services Maine people need. The commission acknowledged that fact, and we hope Gov. LePage will follow their advice.

The group also recommended improved technology at all levels of the process, and streamlined forms to improve information collection.

Follow Mario Moretto on Twitter @riocarmine.

Mario Moretto

Mario Moretto has been a Maine journalist, in print and online publications, since 2009. He joined the Bangor Daily News in 2012, first as a general assignment reporter in his native Hancock County and,...