Sandwich chain Eat has stopped paying its staff for breaks in order to offset the cost of the National Living Wage.
Introduced last week, the National Living Wage means employers have to pay at least £7.20 and hour to over 25s. To offset this cost employees at Eat will no longer be paid for taking a 30 minute break.
The news comes after Caffè Nero said it would stop offering staff free lunch as it looks to cut costs.
A spokesperson told the BBC: "95% of our employees enjoy a pay rate in excess of the £7.20 living wage.
"The average hourly rate in Eat is now £7.60 per hour, some margin above the living wage rate set by the Government.
"We also chose to pay these rates to all employees irrespective of their age.
"In addition, all of our employees also get a free lunch every day that they work, as much free tea and coffee as they want and the opportunity to earn more through bonuses and incentives."
The statement admitted that Eat would no longer pay for a 30 minute break but that all current employees would be compensated through an increased pay rate.
Employees were reported to have been informed by letter of the change to their conditions on 11 April.