The national minimum and living wage are set to increase again this year, with the region's large employers in tourism and hospitality still reeling from the chancellor's £25 billion national insurance hike last April.

Firms are also warning that new rules giving greater protections to workers will put a "further handbrake on job creation and recruitment" because of the added costs associated with hiring new permanent staff.

Government economists have ­estimated that the Employment Rights Act will cost businesses £1 billion a year, once fully implemented over the next two years.

The UK unemployment rate to December 2025 (Image: PA Wire)

The policies, which include a range of basic rights from day one, stronger statutory sick pay, a ban on 'exploitative' zero‑hours contracts, and a shorter qualification period for unfair dismissal, will be phased in from April.

More than a third of employers plan to reduce recruitment of new permanent staff as a result of the changes, according to a survey carried out by the Chartered Institute of Personnel and Development (CIPD).

The survey found that 37pc of 2,000 firms polled are set to cut back on hiring, with more than half of businesses expecting a rise in workplace conflict.

Meanwhile, the rate of unemployment in the UK rose to 5.2pc in the three months to December - up from 5.1pc.

Goymour Group, which runs the dinosaur adventure park ROARR! at Lenwade and Applewood Hall and Countryside Park caravan park and campsite in Banham, employs 300 people during its peak summer season.

Director Adam Goymour said further increases to the minimum and living wage this year will cost the group an extra £40,000 annually, on top of last year's £160,000 national insurance hit.

He said the business will be forced to put prices up across the group due to the changes.

Adam Goymour, director of Goymour Group (Image: Supplied)

"The Employment Rights Act will be a cost to us, especially the statutory sick pay," he said.

"Thankfully, we're a company that does not have high absence figures, but it will be an additional cost."

Under the new rules, statutory sick pay will be paid from the first full day of sickness, instead of starting on day four after three unpaid 'waiting days'.

The lower earnings limit will also be abolished, meaning statutory sick pay will no longer depend on employee earnings above a weekly threshold, making low‑paid and part‑time workers eligible.

It will also aim to ban zero‑hours contracts. Workers on zero‑hours or low‑hours contracts who regularly work more hours than their contract guarantees must be offered a guaranteed‑hours contract based on their actual hours over a certain period.

The hospitality industry is lobbying for exemptions to protect the use of seasonal and zero-hour contracts.

Goymour Group runs the dinosaur adventure park ROARR! at Lenwade (Image: Supplied)

"We already actively give permanent contracts and fixed hours to people that we use frequently every week throughout the year," Mr Goymour said.

"We do guaranteed hours where it fits right for the individual and the business, as we want to look after the people who want to do the work the business needs, and support their livelihoods and way of life.

"We know it's about providing more protection to stop exploitation, but for the tourism industry it's not about exploitation, it's about offering them freedom to work when they want and need to work.

The UK unemployment rate for 16 to 24-year-olds (Image: PA Wire)

"People want that freedom to work, when they want to work, based around their availability, alongside university or perhaps another job.

"If we have to offer guaranteed hours by the letter of the law, people may say they don't want that because they're not able to commit to those hours.

"If we're having to offer guaranteed hour contracts, that could also limit the hours available to other staff members."

Goymour Group's Applewood Countryside Park caravan park and campsite in Banham (Image: Supplied)

EMPLOYMENT RIGHTS ACT

The Employment Rights Act is a major overhaul of UK workplace law.

Key changes include cutting the qualifying period for unfair dismissal from two years to six months and removing the cap on compensation, alongside tougher rules and higher penalties for employers who fail to consult properly on redundancies.

Zero‑hours and low‑hours contracts come under much tighter control, with a new right to guaranteed hours that reflect patterns worked, reasonable notice of shifts, and pay when work is cancelled at short notice.

Statutory sick pay is widened so low‑paid workers qualify from day one, with the three 'waiting days' scrapped.

Paternity and unpaid parental leave will become day one rights, and there will be a new right to bereavement leave. Pregnant workers and new mothers will gain extra protection from dismissal, while employers face tougher duties to tackle harassment.

A new Fair Work Agency will enforce sick pay, holiday pay and minimum wage rules, with powers to fine non‑compliant employers. Most reforms start phasing in from April this year.

The minimum wage will increase from April next year.

For over-21s, it is going up by 50p an hour to £12.71, a 4.1pc rise.

Meanwhile, 18 to 20-year-olds will see the biggest increase, up 8.5pc to £10.85 per hour.

Teenagers aged 16 and 17 will now receive £8 an hour, rising 6pc.

The changes are set to have a significant impact on the region's tourism, hospitality and leisure businesses - large employers that rely heavily on seasonal staff.

© Eastern Daily Press