New employment laws have cost firms £37 billion since Labour came to power, according to a new report today.
Research among 500 firms for the CBI showed most complained that time spent complying with new rights was damaging their business.
Half of those surveyed said labour costs had risen and almost as many believed that regulations introduced since 1998 had harmed the UK's reputation as a place to do business.
CBI deputy director-general John Cridland said: "Companies don't want to turn back the clock. They accepted many of the new rights, but they feel they are being strangled by too much complex and unnecessary red tape, which is holding back the growth of the business.
"Employment laws alone have cost businesses a massive £37 billion in the last nine years. Regulation has its place but the red tape they generate must not be allowed to under-mine a company's ability to get on with the day-to-day job of delivering to customers, increasing competitiveness and developing the business.
"Far too much time and money has been wasted on bureaucracy and firms are struggling with unnecessarily complicated and unclear changes to regulations."
One of the controversial areas for business has been the national minimum wage and the rate at which it has been rising.
But yesterday the Midlands TUC welcomed the seventh annual increase, which came in over the weekend, hailing the 30p rise in the adult rate as a significant boost to the pay packets of more than a million low-paid workers, the majority of them women working part-time.
When the minimum wage was introduced in 1999, workers aged 22 and over were guaranteed an hourly rate of at least £3.60 an hour. Following successive increases above the rate of inflation, adult employees will now be taking home a minimum of £5.35 an hour.
Younger workers will also have bigger pay packets. The minimum wage for 18-21 year olds also goes up to £4.45 an hour, and the rate for 16 and 17 year olds rises to £3.30.
Midlands TUC regional secretary Roger McKenzie said: "Once again a rise in the minimum wage is putting extra pounds in the pockets of thousands of low-income families. But for many families in the West Midlands even the minimum wage appears unobtainable as they struggle to find work. The West Midlands has five of the top 20 constituencies as measured by unemployment rates.
"This latest increase is bound to be criticised by stingy employers as both unaffordable and unnecessary. Any calls from mean bosses that the minimum wage should be frozen next year must be ignored by the Low Pay Commission and the Government. The economy can easily afford another increase next year and there is no reason why the UK can't have a minimum wage of more than £6 an hour by 2008."
He added: "It is time to get tough with the employers who persistently pay poverty wages well below the legally set rates. These minimum wage crooks should be named and shamed."
