Changes to holiday entitlement could cost the hospitality sector up to £200m, the British Hospitality Association (BHA) has warned.
The plans - part of the Work and Families Act - would raise entitlement of statutory annual leave from 20 to 24 days on October 1, 2007 and then to 28 days on October 1, 2008.
The government said six million workers could benefit from the extra eight days holiday each year, which will be introduced to counter employers who include bank holidays in annual leave.
The BHA warned that introducing the new regulations over two years instead of three will also increase the industry's wage bill as well as direct employment costs.
Miles Quest, spokesman for the BHA, said: "The Department for Trade and Industry currently estimates that 49 per cent of hospitality employees will be affected - the highest of any industry - so this is legislation that will really hurt".
Tony Payne, chief executive of the Federation of Licensed Victuallers' Associations, agreed this will raise a range financial and staffing issues that will have to be resolved by licensees.
He said: "You'll have the same stuff but need extra money. If Christmas Day and Boxing Day fall on Saturday and Sunday, then the government usually talk about public holidays falling on Monday and Tuesday. Staff will still be entitled to time off in lieu, and this could cause problems".
John Armstrong, licensee of the Jeremy Bentham in Bloomsbury, London, said the legislation "could have a very big effect on takings.
"If staff want to work 60 hour weeks and earn more money, they should have the freedom to do so. The legislation will affect different people in different ways, but it's about getting a balance".