The Isle of Man Chamber of Commerce says a sharp rise in the minimum wage could put small firms under "unbearable" strain.
A 9.9 percent increase is set to be presented to Tynwald despite inflation being at just 3.3 percent.
A Chamber survey found nearly half of businesses fear a significant impact.
Chief Executive Rebecca George told Manx Radio's Christian Jones this could mean higher prices, fewer jobs, and stalled growth.
