In its annual conference report, Our global future: the business vision for a reformed EU,the CBI said the WTD is a "particular frustration" for businesses, and can create "disruptive uncertainty" for employers.
The WTD gives EU workers the right to a minimum number of holidays each year, rest breaks, and rest of at least 11 hours in any 24 hour period, restricts excessive night work, and provides a right to work no more than 48 hours a week.
Although the directive applies to all member states, in the UK it is possible to opt out of the 48-hour working week.
However, despite calling for reform the CBI has said it supports EU membership, which it estimates is worth up to £78 billion to the UK economy.
Speaking yesterday at the CBI annual conference, director general John Cridland, said: "We are better off in a reformed EU than outside with no influence.
"Each year, membership is worth £3,000 to every household in this country."
The CBI said it wants a permanent opt-out to the WTD because employers should be able to retain flexibility.
It said the EU should allow member states to "set their own rules" in accordance with the "realities" of individual labour markets.
It added despite the majority of employers wanting to opt-out of WTR, few believe paid rest breaks or holiday should be scrapped or that workers should lose the choice over the hours they work.
Nicholas Robertson, head of employment at law firm Mayer Brown, said: "Being in the EU currently offers business minimum standards for employment law, and creates more of a level playing field between businesses in the EU with the aim of fairer competition.
"There is, however, an increasing amount of employment regulations coming from the EU placing a significant compliance burden on businesses and increasing labour costs.
"So businesses might question whether an exit would free businesses from red tape around areas such as the collective redundancy rules, and rules restricting changes to employment arrangements on the transfer of a business."
Prime minister David Cameron has pledged a referendum on the UK's relationship with the EU by 2017 should the Conservative Party win an outright majority at the next general election.