IBEC has claimed that proposals to make employers contribute to statutory sick pay for ill employees could cost the equivalent of 2,500 jobs.
Earlier this year, Social Protection Minister Joan Burton said she is considering making employers pay up to the first four weeks of sick pay benefit which is now paid by the state.
It is estimated that would save the state almost €90m by transferring the cost of four weeks' benefit to employers.
IBEC's director of industrial relations Brendan McGinty said that would equate to employing 2,542 people on the average industrial wage of €35,000.
IBEC claims the move would put struggling firms out of business, force companies to cut pay and benefits.
Mr McGinty also described it as a tax on jobs which ran counter to the Government's Action Plan for Jobs.
Absence from work currently costs Irish business around €1.5 billion a year.
However, in its latest analysis "Sustaining Employment and the Implications of Statutory Sick Pay for Ireland", IBEC says that it does not believe the proposed reforms would result in any fall in absenteeism or long term illness.
It says around 60% of employers are already paying some element of sick pay, but were likely to reassess sick pay policies and possibly cut benefits if forced to pay more through the social welfare reforms.
Brendan McGinty said employers and employees already make obligatory PRSI contributions to the Social Insurance fund which currently pays for the social welfare sick benefit.
An IBEC report on absenteeism published last August found that it accounted for 11 million days of lost productivity annually - at a cost of €1.5 billion or €818 per employee.
Employers also called on the Government to tackle absenteeism in the public service.
Last December, the Department of Public Expenditure and Reform confirmed that the average civil servant took 11.3 days off per year - an absence rate of 4.9% - costing the state up to €500m.
IBEC maintains that if the rate of absenteeism in the public sector were halved, it would yield significant savings.
