There are fears jobs will be lost and businesses will suffer on Norfolk Island when the Australian national pay award system is applied there.
Photo: Norfolk government
The new national award minimum rates come into force on July 1 as Canberra extends its control over the island - a process that it began two years ago.
The president of the Norfolk Island Accommodation and Tourism Association, Rael Donde, said it would mean wage increases of at least 40 percent in the island's key tourism sector.
He said because the island's economy was already in decline, businesses would have to either cut wages or lay off workers and that would mean reduced services for visitors.
"For instance there won't be any tours on Sundays.
"Cafe owners are considering closing on days when they would have to pay penalty rates because the penalty rates are so excessive.
"On a Sunday it is 160%, on a public holiday it is 225%, so it is just unsustainable for businesses on the island," Mr Donde said.