FMLA Is the New COBRA: What HR Needs to Know About Compliance in 2025

Most employers already know how complicated COBRA can be—that’s why they outsource it. FMLA is proving to be just as complex—if not more so. Between rising lawsuits, shifting compliance rules, and employees more aware of their rights, managing FMLA internally has become just as risky—if not more so—than COBRA. What used to be a routine HR task now comes with legal exposure, heavy documentation, and constantly moving targets. For many organizations, FMLA is becoming the new COBRA—bringing enough complexity and liability to make outsourcing a smart next step.

Without an effective FMLA administration process in place, employers expose themselves to major compliance missteps. These include failing to recognize qualified leaves, missing critical deadlines, or applying inconsistent policies across employees in different departments or locations. Each of these missteps can invite Department of Labor audits or employee lawsuits—both of which are sharply on the rise. In fact, the average cost to defend an FMLA lawsuit is over $80,000¹, even if the employer wins.

Why Now? Legislative and Compliance Pressures Are Mounting

FMLA administration has become even more complex in the last few years. New federal, state, and local paid leave laws have layered additional compliance requirements onto already complicated federal FMLA rules. For example:

• Several states—including Colorado, Oregon, and Maryland—recently implemented state-level paid family and medical leave programs (2023–2024), requiring employers to track eligibility and coordinate state and federal leave. S. DOL State Paid Leave Interactive Map
• In 2023, the Department of Labor intensified its enforcement of FMLA compliance by broadening its investigations to include detailed wage and hour data—signaling a more aggressive and integrated approach. This shift emphasizes the importance of properly notifying employees of their rights and meticulously documenting every step of the leave process. According to HR Dive ², the DOL has begun pairing FMLA reviews with Fair Labor Standards Act (FLSA) audits, placing even greater pressure on employers to get FMLA administration right the first time. DOL Employer Guide

These new mandates leave HR teams struggling to stay current and compliant—especially when dealing with intermittent leave, overlapping jurisdictions, and potential ADA accommodations.

What Employers Are Doing Instead

Because of these challenges, employers are increasingly outsourcing their FMLA administration.

• 46% of large (1,000+) employers outsource FMLA administration – up from 35% in 2014 ³
• 30% of small (50+) employers do as well – up from 21% in 2014 ⁴

Third-party administrators (TPAs) reduce risk, streamline leave tracking, and help organizations maintain compliance across multiple locations. But not all TPAs are equal.

At BASIC, our FMLA EASE Plus with Absence Management solution is designed to remove the administrative burden from your HR team while ensuring compliance and consistency.

Why BASIC?

Our FMLA EASE Plus with Absence Management solution helps employers simplify compliance and stay in control. Here’s what sets us apart:

• Fair, consistent application of FMLA—compliant with all federal and state requirements for every employee at every location
• Unlimited training for HR, supervisors, and managers on FMLA rules, regulations, and how to recognize qualifying events
• Customizable service options to fit the needs of organizations large or small
• IVR phone line and online call-off tools—employees can easily submit leave requests or report absences themselves
• Real-time automated email alerts sent to supervisors, managers, and HR immediately after a leave request—ensuring timely, documented communication
• Full absence management capabilities—track and report on any type of absence, not just FMLA
• Third-party (BASIC) approval/denial of leave requests—promotes consistent compliance and removes internal bias or discomfort
• Built-in abuse monitoring—flags abnormal claim patterns by individual, department, or location
• Secure supervisor and HR portals to view, export, and manage real-time and historical absence data
• Proactive ADA triggers and return-to-work tracking to help teams stay compliant and prepared
• Robust reporting capabilities—customizable, automated reports that provide clear visibility across all locations

And perhaps most importantly—our platform excels at tracking intermittent leave, which continues to be the most difficult and abuse-prone area for employers to manage.

Case in Point: Saving Money and Reducing Risk

A mid-sized employer with 450 employees was handling FMLA manually, relying on spreadsheets and overburdened HR staff. They partnered with BASIC to implement the full-service FMLA EASE Plus with Absence Management solution.

Within a year:

• BASIC’s FMLA platform flagged suspicious leave patterns and improved communication
• Supervisor training led to earlier event identification and proper certification tracking
• Administrative time and error rates dropped significantly
• The employer realized an annual cost savings of $41,380, even after accounting for service fees

That’s the power of smart FMLA outsourcing.

Get in Touch

BASIC has been helping employers of all sizes lift the burden of FMLA compliance for over 15 years. BASIC’s FMLA EASE Plus with Absence Management service delivers consistent, risk-reducing leave administration for organizations across industries—from small businesses to some of the country’s largest employers, including those in hospitality, resorts, and gaming.

If you’d like to talk through how we can support your FMLA and Absence Management needs, please request a proposal today.

Sources:

1. ESIS, Inc. (2020). The Cost of Noncompliance When Managing Employee Absence. https://www.esis.com/content/dam/chubb-sites/esis/esis-en/documents/the-cost-of-noncompliance_v1_ada.pdf
2. HR Dive (2023). DOL adds FLSA to FMLA investigations.

https://www.hrdive.com/news/dol-adds-flsa-to-fmla-investigations/737202

3. Disability Management Employer Coalition (DMEC). (2021). Employer Leave Management Survey White Paper. https://dmec.org/wp-content/uploads/2021-DMEC-Employer-Leave-Management-Survey-White-Paper.pdf
4. Ibid.