Thousands of catering and hospitality businesses could be forced to shed staff following a Government move to increase the statutory minimum for paid holidays.
The new rules, expected to come into force next April, will increase employees' statutory minimum holiday entitlement from the current four weeks, or 20 days, per year to four weeks plus bank holidays, or 28 days.
But British Hospitality Association (BHA) chief executive Bob Cotton warned that the greater number of holidays will lead to an average 3.5% leap in payroll costs.
"The increase in holiday entitlement will have the same effect on employers as the minimum wage increase," said Cotton. "With increasing labour costs, jobs will simply be reduced."
Cotton added it was now too late to affect the Government's decision, and the BHA would focus on ensuring employers
are made aware of the problem and given appropriate advice on how to deal with it.
A recent survey of BHA members found that more than 62% of employees are not currently receiving the extra days.