A new law dramatically affecting employee leasing took effect on January 1, 2012. An employee leasing company, formally known as a professional employer organization (“PEO”), is a business that provides human resources and staffing services to its clients. Both PEOs and businesses utilizing PEOs should be familiar with the Professional Employer Organization Regulatory Act because it affects new and existing PEO-client relationships.

Under the new legislation, all PEOs must be licensed by Michigan’s Department of Licensing and Regulatory Affairs (“LARA”) by September 1, 2012. Several exemptions to the licensing requirements are available...