UK employers are urging MEPs to vote against proposals to raise the amount of full paid maternity leave from 14 to 20 weeks.
The Federation of Small Businesses says the plans are unaffordable and that it could cost their members £2.5bn a year.
The coalition government says the amendments would double its costs.
Supporters say it is wrong to allow policy to be influenced by temporary economic downturns and that a price cannot be put on a contented workforce.
Women in the UK are currently entitled to 12 months off, with the first six weeks on 90% pay followed by 33 weeks on Statutory Maternity Pay of just under £125 a week.
Businesses can claim back all or most of the money from the government, but say it would put more pressure on them at a time when they are struggling.
Kieran O'Keefe from the British Chambers of Commerce says the proposal would particularly hit businesses with only a few staff.
He said: "Smaller operators are always the ones that seem to suffer the most from this.
"Any change like this will be extremely hard for them to absorb - having to cope with the legal changes, having to cover for somebody while they're out the workplace for an extended period of time - I think is the last thing you want to be doing in the current economic conditions."
The FSB is urging the European Parliament to reject these proposals and is calling for maternity and paternity to be reformed by introducing a "flexible leave" system to allow parents to choose their leave arrangements.
Lynette Burrows, an author on children's rights and a family campaigner, said the proposals could mean businesses would employ men rather than women.
She said: "I think women will just have to take on the chin the fact that there are sacrifices to be made if you want the inestimable pleasure and treasure of having a family that you won't be able to compete on an equal footing with men."
Employment Relations Minister Edward Davey said: "This is a substantial increase at a time when economies across the EU can least afford it.
"In addition to the cost of these proposals - which will double the £2 billion we currently spend on maternity pay - they will be regressive as most of the additional money will go to the highest paid women."
But Belinda Phipps, the chief executive of the National Childbirth Trust, said the objections to the proposed new law were invalid.
She said families should be able to choose how long they should be at home to be able to bond with their baby and that the "temporary financial crisis" should not impact policy.
One mother said it was "not fair that only well off people are able to choose how long they can spend off work while poorer people have to go back to work".
Euro-MPs will vote on the measure later this week.