Many companies are scrambling to quickly assess how to reduce the business impact of the upheaval to U.S. manufacturing and trading with the recent onslaught of tariffs threatened or imposed by the United States and the related global response. Similar to the COVID-19 pandemic, employers may now be looking for ways to manage the impending financial impact of tariffs on their business, including trying to lower HR-related costs and obligations through larger-scale employee group terminations.

This article provides reminders of some of the employee benefits issues to consider if your company is considering group terminations as a way to tackle the business impact of tariffs. In our experience, employers often provide enhanced benefits for employees losing their employment as part of a group termination. While the enhanced benefits may add to the employer’s costs on a temporary basis, it is still less expensive in the long run than the ongoing costs of maintaining a larger active workforce.

Another cost-saving option an employer may consider is to reduce or suspend employer contributions to retirement plans, which is further discussed here.

This article does not address the employment aspects of a group termination, such as whether the group termination triggers federal or state WARN notice or other similar requirements and employers should consult their labor & employment counsel and advisors whenever considering a group termination of employees.

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