The Island's Chamber of Commerce is calling the 9.9 percent minimum wage rise planned for next April a national crisis.
In an open letter to government, the chamber warns the increase could trigger widespread job losses and business closures - especially in hospitality, retail, care and manufacturing.
It argues the rise is higher than the UK's 4.1 percent increase and would leave Manx employers paying around a quarter more for 18-20-year-olds than UK counterparts.
Instead, the organisation says a rise in line with inflation would be more sustainable.
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