The law would allow shops across Switzerland to stay open on weekdays from 6am to 8pm and from 6am to 7pm on Saturdays.
All the country’s cantons, except for Ticino, are opposed to the law because they say the legislation threatens their autonomy.
The proposal amounts to a serious threat to “federalism”, the conference of cantonal directors of the economy said in a position paper.
The group added that the law does not take into account regional sensitivities.
Retailers have expressed frustration over limits to store openings in many parts of Switzerland, where stores in some cantons are forced to close as early as 4pm on Saturdays and 6.30pm on some weekdays.
Shops in Switzerland are closed on Sundays except at airports and train stations.
Retailers with outlets in cantons bordering neighbouring European countries say the restrictions are encouraging cross-border shopping.
Supporters of the law say the longer hours respond to the needs of customers and reflect an evolution in society.
“Swiss retailers are not asking to open their stores 24 hours a day,” said the CICDS, a retail trade umbrella group, the ATS news agency reported.
“They are looking for ways to provide an appropriate response to the evolution of consumer habits.”
Right-wing parties back the proposed changes, with the Liberal party saying that if Switzerland didn’t change its restrictive store opening policies it would lose eight billion francs ($8.9 billion) annually.
The law would also end a mixed system that creates inequalities, backers say.
For example, shops in the centre of Zurich can stay open on Saturdays until 8pm, while those in nearby Lucerne are required to close their doors at 4pm on the same day.
Retailers in cantons bordering European countries such as France, Germany and Italy are also penalized by having shorter opening hours, supporters of the law argue.
But unions argue that cantons such as Zurich and Aargau where shops are allowed to stay open longer still have a problem with cross-border shopping in Germany.
“The problem is above all the strong franc,” said the SGB, a union that represents shop employees.
The federal law would change the working conditions for shop employees who are already facing stress and put under pressure, unions representing workers agree.
The extension of hours would mean working more in the evening without extra compensation, the SGB and Unia unions said.
A consultation period on the proposed law was set to close on Friday.