Ibec has told the Government it should impose work permit restrictions on Romanian and Bulgarian workers when the two states join the European Union in January.
The employers' body has said a cautious approach is required and temporary restrictions are necessary to assess the "economic climate" in the Republic.
The recommendation represents a U-turn in Ibec policy toward EU enlargement and the free movement of workers.
Before the last EU enlargement in 2004, Ibec was a strong supporter of the principle of free movement of workers, one of the four basic freedoms associated with EU membership.
It cited labour shortages in some industrial sectors for its support of free movement of workers back in 2004.
In a letter sent to the secretary general of the Department of Enterprise earlier this week, Turlough O'Sullivan, Ibec's director general, said Ibec thought the best policy for the Government was to implement a work permit scheme.
"We believe that this approach would provide the Irish Government with an opportunity to monitor the situation on an ongoing basis and to begin the necessary adjustments to full, free movement which will occur in the medium term," Mr O'Sullivan wrote.
He added that Ibec was conscious that many other EU states were going to apply restrictions to limit the flow of migrant workers from both states.
So far only Finland and Slovakia have said that they intend to allow workers from Bulgaria and Romania to come and work freely without restriction from January.
Many other states, including Britain, have indicated that they are planning to introduce some form of work permit system to restrict the flow of migrant workers.
The Irish Congress of Trade Unions also called yesterday for the Government to introduce transitional restrictions on Bulgarian and Romanian workers. It also called for restrictions on self-employed people from the new EU member states.
A failure to restrict self-employed people would facilitate the disproportionate growth of self-employment and disguised employment would exacerbate the already unbalanced and unsatisfactory situation in the construction sector, David Begg, Congress general secretary, said.
Taoiseach Bertie Ahern said last night that although no formal decision had been taken by Cabinet on the issue, Ireland would introduce a work permit system.
"We are not in a position in our analysis now to open up fully when other countries haven't gone that far," said Mr Ahern, on the sidelines of an EU summit in Finland.
He said Ireland had taken a very forward position in 2004 to allow free movement of workers from the new member states. He said he hoped other countries would follow that example but in the meantime Ireland had an existing work permit system, which meant that if Ireland needed workers they could be brought into work using this system.
Mr Ahern's comments suggest the Bulgarians and Romanians will be treated as any other third-country nationals when they join the Union and face a labour market test. This test means that people are only allowed a permit to work in the Republic when no other European citizens can do the specific job.
Ibec said no labour market test should be applied to workers from both countries when deciding if they could work in the Republic. It said Romanians and Bulgarians should be free to work in the Republic if they were offered a job.