The staff, who deal with members of the public visiting the palace in central London, have been asked to accept reduced working hours, which will hit their annual earnings hard, 'The Sunday Times' reported.
The UK's Public and Commercial Services Union (PCS) is to hold talks on a compromise deal tomorrow but a source close to the negotiations told the newspaper that a ballot to strike was likely to follow.
All the workers involved are uniformed wardens who are employed in the parts of the palace open to the public, protecting the exhibits and helping visitors, as well as working in the ticket office.
One staff member was quoted as saying: "It's in the contract that they can cut the London living allowance and they're also cutting the starting times in the morning and the finishing times. I'll miss it if I have to go but I just couldn't carry on working here if it goes ahead."
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It follows a similar dispute at Windsor Castle last year - thought to be the first in the history of the monarchy, which saw staff threatening to strike over additional duties that they were being asked to take on without a pay rise.
Improvements to the private apartments now used by William and Kate were completed in 2014 and cost a further 4.5 million pounds.
The public part of the building is run by Historic Royal Palaces charity and attracts about 400,000 visitors a year to its exhibitions, restaurant and functions.
The charity said: "The changes to working hours affect a small number of colleagues in the front-of-house team at Kensington Palace. We have given a year's notice of the planned changes and are currently in discussions with the PCS union."