Comparing PEO vs employee leasing usually turns out to be comparing a term with its own former name. In current usage they describe the same co-employment arrangement, and the older word survives in state statutes and long-running contracts. There is one genuine distinction underneath, and it is worth knowing which side of it a proposal sits on.
The same thing, renamed
Employee leasing was the industry's original description of co-employment, and it was dropped because it implied the provider supplied the workers. It never did. You recruit, hire and direct your own people; the provider takes the administrative and tax half of employing them. A provider using both words in different states is usually being accurate, because several state registration statutes were written with the older vocabulary and never renamed.
The one real distinction
Staff leasing in the strict sense, where a provider recruits and supplies workers who remain its own employees under its direction, is a staffing service. That is genuinely different: different contract, different liability, different price. The test is who recruits, who directs the work day to day, and whose employees the people are under the agreement in front of you.
How to tell which you are being sold
Read the definitions clause rather than the brochure. A co-employment agreement will describe worksite employees and allocate employer duties between the parties. A staffing agreement will describe the provider's employees being assigned to you. If a proposal offers both, price them separately, because bundling them hides which risk you are actually buying.
Questions people ask about peo vs employee leasing
Is a PEO the same as employee leasing?
In current usage, yes: employee leasing is the older name for the same co-employment arrangement, and several state statutes still use it. It is not the same as staff leasing in the strict sense.
What is the real difference?
Whether the provider recruits and supplies the workers. In co-employment you hire and direct your own people; in a staffing arrangement the provider's employees are assigned to you.
How do I tell which contract I have?
Read the definitions clause. Co-employment agreements describe worksite employees and allocate employer duties between the parties; staffing agreements describe the provider's own employees being assigned.