Ibec has said the expected proposal by the Low Pay Commission for a 50c increase in the national minimum wage is at odds with all the economic evidence.
The employer group said, if adopted, the rise would heap pressure on companies struggling to stay in business and would erode competitive gains of recent years.
Ibec CEO Danny McCoy said: "Given the economic evidence available, it is inexplicable how such a rise could be proposed.
“Prices across the economy are below where they were in 2008 and the real value of the minimum wage has actually increased during the crisis.
"Many businesses still cannot afford pay increases and turnover in sectors such as retail remains up to 20% below the pre-crisis peak. 60% of domestic services companies, for example, are not able to afford pay increases this year.”
Last week RTÉ learned an increase of 50c to the minimum wage is likely to be recommended by the group tasked with examining this pay rate.
The Low Pay Commission's first report is due to be published by the Government on Tuesday.
An estimated 100,000 workers across the country receive the minimum wage rate, which currently stands at €8.65 an hour.