A PEO lease is the older way of describing co-employment, from the period when the industry called itself employee leasing. The word survives in state statutes, in long-running contracts and in the vocabulary of anyone who bought one before the rebrand. It describes the same arrangement rather than a different product.
What the word once implied
Leasing suggested the provider supplied the people, which was never what these arrangements did and caused enough confusion that the industry changed its language. In co-employment you recruit, hire and direct your own staff; the provider takes the administrative and tax half of employing them. Nobody is leased to you and you are not renting labour.
Where a genuine leasing arrangement differs
Staff leasing in the strict sense, where a provider recruits and supplies workers who remain its employees under its direction, is a staffing service and a different contract entirely. If a provider offers both, price them separately and be clear which one each quote covers. The test is who recruits, who directs the work, and whose employees the people are under the agreement you are being shown.
Why it still matters when reading documents
Several state registration statutes still use the leasing vocabulary, so a provider describing itself as a licensed employee leasing company in one state and a professional employer organisation in another is usually being accurate. Read the definitions clause of any contract using the older words rather than assuming, because that is where the arrangement is actually defined.
Questions people ask about what is a peo lease
What is a PEO lease?
An older name for a co-employment arrangement with a professional employer organisation. It describes the same thing as a modern PEO agreement, not a different product.
Are employees leased from the PEO?
No. You recruit, hire and direct them; the provider becomes an employer for administrative and tax purposes. The leasing word is a historical artefact that caused exactly this confusion, which is why the industry dropped it.
Why do some states still say employee leasing?
Because their registration statutes were written with the older vocabulary and were never renamed. A provider using both terms in different states is usually being accurate rather than evasive.