The National Minimum Wage rise next month will deter small businesses from recruiting additional staff, according to research.
Four in 10 of the 100 UK firms surveyed by the Forum of Private Business (FPB) lobby group said they would have to increase employment costs as a result of the National Minimum Wage increase.
Victoria Carson, campaign manager for the FPB, said: “Little is being done to encourage smaller firms to take on more staff. The evidence is that these constant increases, coupled with changes in maternity rights and plans to extend holiday leave, are pushing up prices.”
The National Minimum Wage is due to rise by 30p per hour from £5.05 to £5.35. The rate for workers aged 18-21 will rise by 20p to £4.45 an hour and to £3.30 an hour for 16- and 17-year-old employees.
The CBI said earlier this year that the National Minimum Wage increase could damage UK competitiveness in a global market.