The Confederation of Norwegian Enterprise (NHO) agreed that employers should advance sick pay. This was a result of the strike in May. However, small businesses cannot afford this. Surveys show that four out of ten small businesses with fewer than nine employees believe they will have to shut down if they are required to advance sick pay.

Altogether, three out of ten businesses in Norway may be forced to shut down, according to a survey conducted by NHO Service and Commerce.

“These are extremely serious figures. We have ended up in a situation where small businesses are forced to act as a bank for the state and suffer the consequences when the state and the system fail,” says Chief Executive Officer Vegard Einan of NHO Service and Commerce in a press release to NTB.

Advancing payment means that businesses pay wages as normal to an employee who is on sick leave and then receive reimbursement from Nav afterwards, something many businesses already do. It has been a major issue in this year’s wage settlement.

However, many businesses cannot afford to act as a bank for a filthy rich state, and now the warnings are coming.

Eight out of ten businesses believe that the consequences of having to advance sick pay for four months will be severe.

First it was expensive electricity that brought businesses to their knees, then persistently high interest rates and low activity in residential construction. Many businesses simply have no margin left.

Chief Executive Officer Kristin Krohn Devold of NHO says that advancing payment may mean the end of the road for many. She is disappointed that the state remained passive and watched as the Norwegian United Federation of Trade Unions (Fellesforbundet) pushed through the requirement for four months of advancing payment.

The advancing of sick pay was among the reasons why there was a strike in the hotel and restaurant industry for more than two months. NHO Tourism (NHO Reiseliv) said it was compelled to agree to the provision.

“When we simultaneously experience a counterpart in Fellesforbundet that rejects most attempts at compromise, and a government that stands paralysed and watches, NHO Reiseliv has unfortunately found itself compelled to accept the requirement to advance sick pay,” said Chief Executive Officer Kristin Krohn Devold at the end of May.

Since then, many other employers’ associations have also agreed to the provision.

The advancing of payment is now becoming a political issue, according to the director of NHO Service and Commerce.

“The government has abdicated from the tripartite model, and this will result in bankruptcies and unemployment. This is literally not something one can live with, and it will become a major political issue to pursue going forward,” says Einan.

The hairdressing industry has the worst figures. Half of the businesses within the sector state that advancing payment will place the very existence of their business at risk.

“Advancing sick pay has major consequences. Small businesses experience this as an existential threat,” says Einan.