Labour's workers' rights overhaul will cost businesses almost £5billion a year to implement, the government's own data has shown.
An impact assessment report found the measures would "disproportionately" hit smaller firms, which together employ around 13million people.
It warns companies are likely to react to the changes by putting prices up and cutting staff.
The report indicated changes would cost businesses £4.5billion a year but said: "We are confident that the total direct cost to business will be less than £5billion annually.”
Strikes could also become more common as the expected reforms remove anti-trade union laws, extending the mandate for industrial action from six to 12 months.
But the report by the department for business and trade concluded that the reforms would be "pro-growth" as effected businesses would be offset by higher productivity with more workers entering the labour market and staff who are better off.
However, the analysis concluded that the package was “pro-growth” because the hit to business would be offset by higher productivity, more workers entering the labour market and happier and better-off staff.
It said: “We also expect there to be significant wider benefits to society, including positive impacts on health and wellbeing, equality, competition and participation.”
Opening a Commons debate on the Employment Rights Bill, deputy prime minister Angela Rayner said the changes represented a "momentous opportunity to chart a new path for the UK economy”.