The State Government is banning most shops from opening on Christmas Day, Boxing Day, Easter Sunday and Good Friday unless their owners can prove compelling demand from the local community.
Shops will also only be able to open for half a day on ANZAC day.
The new law prevents shop owners forcing staff to work on those days.
Sydney-based Muslim community spokesman Keysar Trad said workers of all faiths were entitled to a break and called for the two main Muslim public holidays to be recognised as well.
"It does give the impression that we are a solely Christian nation and it raises the issue of other religions too, whether you are Hindu, Buddhist, Muslim," he said.
"I know Muslim workers face problems asking for their public holidays off work at the moment.
"There are only two Muslim public holidays, so it is not a lot to ask."
He cited the example of Lebanon where Christian and Muslim public holidays are widely celebrated by members of both faiths.
"Productivity in Lebanon has not been hurt by the way they do things. Celebrating other faith's public holidays, actually, is excellent for community relations."
Shops in Sydney CBD, Newcastle CBD and in Cabramatta are exempt from the new law, as are small businesses.
NSW Minister for Industrial Relations John Hatzistergos introduced the legislation to Parliament in a bid to allow shop workers to spend the major Christian public holidays with their families.
A spokesman for Mr Hatzistergos admitted the days involved were Christian-orientated, but said the new law, which is supported by opposition ministers, was not about religion.
"It's about allowing workers to spend time with their families," he said.
"It's not about enshrining something for religious reasons, it's about protecting workers rights."
The law has been applauded by unions, some major retailers and veteran groups.
Source: The Australian