Jersey's Chamber of Commerce expects businesses in the island to suffer 'casualties' when the minimum wage rises to £13 next April.
The body which represents more than 500 industry members believes the sector will be impacted as the government moves towards a living wage of an estimated £14.17 an hour by 1 April 2026.
Chamber estimated that will mean the business sector facing an estimated £24 million hike to their annual employment costs due to the wage rises.
CEO Murray Norton says it will introduce new challenges, in what is already a competitive global marketplace.
"It will raise the cost of products. It will raise the cost for those coming to visit our islands, staying in hotels, and enjoying the visitor economy.
"[Businesses] are very concerned about the wage rise and what it will mean for those working on Bank Holidays, where that figure, be it £13+ - or £14+ in 2026 - will, of course, be double pay.
"Some areas in the activities sectors are already very concerned about the wage rise."
Read: Minimum wage in Jersey to rise to £13 in April 2025
Mr Norton also expects some staff to have their hours cut or even possible redundancies as some sectors struggle to bear the cost increases.
He says the Chamber of Commerce is working with the government to understand the £20 million support system on offer and if there are other options available to support businesses who are struggling and will struggle, once the living wage is introduced.
Social Security Minister Lyndsay Feltham told us the Economic Development Minister Kirsten Morel will make detailed announcements in the coming weeks.
"We are focusing on productivity as well as support for our key industries.
"Employees will benefit from the increase in the minimum wage, As Social Security Minister, I am acknowledging that it is a step towards a living wage and not yet a living wage."
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