MPs are "asleep on the job" when checking European laws to stop them interfering with British business, the Confederation of British Industry says.
EU laws are making UK businesses uncompetitive, Jones said
CBI director general Digby Jones said Parliament was not equipped to stop new rules from marching the UK "valiantly towards the 70s".
The government now promises to tighten up MPs' scrutiny of European laws.
Peter Hain, leader of the House of Commons, said the government was "on the case" regarding the issue.
Speaking to the BBC's Today programme, Mr Hain admitted that Britain's "honourable tradition" of faithfully implementing EU laws meant that legislation often became much more bureaucratic than originally intended.
But he said a new joint Parliamentary committee set up to scrutinise European laws would enable MPs to look at and change legislation at an earlier stage.
"We are on the case and we can work with the CBI and other organisations to make sure our business and economy remains strong," he said.
Mr Jones called for more attention to be paid to Brussels legislation.
Government measures to deal with the issue did not go far enough.
"I think MP's should get more involved more early," he said.
"We have the most successful economy in the developed world and we do not want it ruined by regulations emanating from Brussels which are marching valiantly towards the 70s."
He spoke after the Conservatives said UK businesses should be able to challenge EU laws in the High Court.
'Early warning system'
With half the laws affecting UK firms drawn up by the European Commission, Mr Jones said Parliament needed to influence EU proposals early on.
"A reformed EU has to be our goal and the UK is now in a great position to advance an agenda for change," he said.
"There have been instances where Labour MEPs in Brussels have voted directly against the policy of the UK Government."
The problem, according to Mr Jones, is that the "goldplating" and "heavy-handed" execution of EU laws had made many UK businesses uncompetitive.
"Westminster never seems tuned into what Brussels or Whitehall are doing," he warned.
The head of the employers' organisation suggested an "early warning system" be introduced so MPs and interest groups can respond quickly to European Commission suggestions.
He also said ministers should be set targets for success in EU negotiations.