According to the latest research from Bibby Financial Services, more than two-thirds (71 per cent) of small business owners and managers are in a state of inertia over the NMW hike, and have failed to make any provisions for the increase, even though the Government claims more than one million people are set to benefit from it.

The NMW will rise to £5.73 an hour for adult workers aged 22 and above, and to £4.77 an hour for workers aged 18 to 21.

one in 10 small businesses said they would only begin thinking about the NMW rise once it happened.

This is particularly worrying, says Bibby, at a time when the Government is taking an increasingly tougher stance on employers who fail to abide by the legislation, threatening stiff fines and criminal proceedings for those who do not comply.

Of those firms which have made plans for the NMW, some 15 per cent are looking to cut costs elsewhere in their business to pay for the rise, while 21 per cent are reducing the number of their employees either through redundancies or not replacing staff when they leave.

Other new regulatons also came into effect yesterday concerning pension schemes, employers' liability compulsory insurance and consumer protection.