Commissioner of Labor Receives USDOL Report on Maine’s Unemployment System Bookmark and Share

February 27, 2014

For Immediate Release: February 27, 2014 Contact: Julie Rabinowitz, 207-621-5009

Findings confirm concerns about the appeals process

AUGUSTA—Commissioner of Labor Jeanne Paquette announced today that she has received the final report from the U.S. Department of Labor’s (USDOL) review of the unemployment appeals process in the Bureau of Unemployment Compensation, part of the Maine Department of Labor, and the Unemployment Insurance Commission (UIC), which is an independent state agency appointed by and reporting to the governor.

The eight-page letter from Holly C. O'Brien, regional administrator of the Employment and Training Administration of the USDOL, reviews both Maine's performance against applicable national standards and particular areas of concern raised initially by a memo sent from Jennifer Duddy, chair of the UIC. The findings of the review corroborate Duddy's concerns about inconsistent admission of business records, inconsistent admission of witnesses in hearings, and a lack of agreement about what constitutes a precedent and how that should be applied at the lower levels.

“Last year, both members of the Unemployment Insurance Commission and I raised concerns about the need for improvements and consistency in the way the unemployment system functions, especially the appeals process. Many of these concerns were echoed by complaints received by Governor Paul LePage,” said Commissioner Paquette.

She continued, “The concerns that we discussed with the hearings officers last spring, related to the admission and weighting of hearsay testimony and business records, were not only supported by the findings of the Governor’s Blue Ribbon Commission, but also are the same findings of the USDOL's independent review. My responsibility as commissioner is to ensure that the law is applied fairly and to manage the staff of the department. The findings of both these independent and non-partisan reviews confirm that Maine's appeals system has not been consistent in applying the law. We are addressing this serious issue."

The report states the evidentiary procedures put in place by the division after the meeting with the Governor last year, including holding the record open to receive documents discussed but not presented in the hearing, "are limited and not sufficient to cure what appears to be a long standing prejudice against certain types of evidence." The report specifies a number of other problems in the system, including a need for a review of state statutes and rules and consideration of federal recommendations, more training, establishment of uniform standards, more communication between the appeal levels and the establishment of a precedent manual.

The findings of the USDOL review concur with and expand upon the findings release last December, by The Unemployment Reform Blue Ribbon Commission http://www.maine.gov/tools/whatsnew/index.php?topic=Gov+News&id=610110&v=article2011 . The Blue Ribbon Commission report provided unanimous recommendations identifying reforms to improve the unemployment system and specifically called out the need to bring consistency to the application of the law on business records.

“Although this process has generated much controversy, the outcome is positive for both workers and businesses. No one benefits when either employees or employers abuse the system," stated Commissioner Paquette. "Maine's unemployment system by statute gives the authority and responsibility for its adminsistration to the appointed commissioner and the appointed members of the UIC. As commissioner, my job is to ensure not only due process for both employers and employees, but also that the unemployment system is fair, efficient and responsive and follows the law. I appreciate the concerns that both the USDOL and the Blue Ribbon Commission have raised, and I will do my utmost to continue to safeguard both the integrity of the system and the confidence of Maine’s people.”

Governor LePage said that the letter from O'Brien, “confirmed several of my concerns, as did the Blue Ribbon Commission report, concerning the appeals process. The department is taking steps to ensure the law is fairly applied to both employers and employees, as is only just.”

The Department of Labor has already begun to implement the Blue Ribbon Commission recommendations, including improving staffing, increasing communication between the different parts of the system and ensuring consistency in the application of the law—especially surrounding business records in the appeals process.

In January, the department hired a new chief hearing officer of the Division of Administrative Appeals. Former Chief Justice Daniel Wathen, a co-chair of the Blue Ribbon Commission, participated in the interviewing of the candidates for that position to make sure that the finalists for the position had relevant knowledge of appeals and employment law.

In addition, the department is working with the Governor’s Office to propose an emergency bill this session that will improve the unemployment system’s efficiency. This bill is LR 2772, An Act To Allocate a Portion of the Reed Act Distribution of 2002 To Use for the Administration of the Unemployment Insurance and Employment Services Programs.

This bill would authorize use of money that had been dispersed to the states by the federal government and is currently held within the Unemployment Trust Fund. The federal government rebated these funds back to the states to fund improvements to the operations of unemployment systems and employment services programs, including upgrading technology infrastructures and maintaining staffing levels.

Maine has an opportunity to use these funds to bring improvements to the unemployment system, as recommended in the Blue Ribbon Commission report, which will reduce fraud and increase responsiveness without requiring General Funds or an increase in payroll taxes for employers.

The letter from O'Brien can be found here: http://www.maine.gov/tools/whatsnew/attach.php?id=615390&an=1

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Supporting documents

Letter from Holly O'Brien, USDOL