Companies using the government’s coronavirus Fluo scheme are now contributing to workers’ wages.

Since March, the coronavirus job retention scheme has paid 80% of the wages of workers on leave, up to a maximum of £ 2,500 a month.

But now it is going down to 70%, employers pay 10%.

The project is expected to be completed by the end of October, and Chancellor Isa Sunak has repeatedly denied any involvement.

Last month, he said it was “wrong to hold people back” in situations where they had no real chance of getting a job back.

• How is it changing now?

From September 1, the government will pay 70% of wages up to a cap of 2, 18,187.50 per month. Employers are already paying pension contributions and national insurance to employees, but now they also have to pay 10% salary.

In October, the government will pay 60% of wages up to a cap of 8,875. The owners’ share of the bill will then go up to 20% of wages.

Analysis:

BBC Business Correspondent Dharshini David

It was hailed as groundbreaking: a project that provided a significant livelihood for the business and more than 9.5 million employees.

But closing the UK business outside the retention scheme is by far the biggest challenge for Rishi Sunak.

The business is far from normal, with one in 12 people having a state-sponsored salary

The Chancellor asserted that it was time to end the project with the resumption of business. So far the price-tag has exceeded £ 35 billion, pointing to the kind of tax that kind of road goes up and down even further.

Instead, he pointed to other forms of assistance that have been offered to retain and create jobs, from the bonus scheme on employees to deduct targeted VAT for the hospitality industry.

Yet as the Chancellor’s own independent predictor, unemployment could reach a rate not seen since the 1980s.

Mr. Sunak admits he can’t save every job. The challenge is to prevent a crisis that could ultimately be far more costly for the economy.

Unemployment fears

The increased cost of the project has created a problem for employers, who face difficult decisions about whether employees will have to do extra work.

Craig Beaumont of the Federation of Small Businesses told the BBC’s Today program that one million small employers across the country used the Fallu scheme.

He said 23% of small employers are considering reducing their main accounts over the next three months.

“It’s very serious. It’s a huge part of the economy,” he said.

“Seventy percent of those who work in the private sector do it for a small business, so if it happens without any intervention, it’s a huge increase in mass unemployment.”

Paul Dallas, UK economist at Capital Economics, told the program that comparative plans from other countries, such as France and Germany, had been extended.

Last week, for example, Germany agreed to extend a project to pay workers affected by the coronavirus epidemic by the end of 2021.

Mr Dallas said: “From that point of view, the UK project looks a bit short, especially when you consider that the upper echelons of sectors that are constrained by social distance make up the UK economy.”

However, he added that many jobs are currently “frozen” and will not return after the coronavirus crisis.

“You want to start the process of rehabilitating people who will stay for many years,” he said.

Tough decision

Some businesses that are still plagued by epidemics, live music venues that have not yet reopened, are feeling the effects of furlough tapping.

Tristan Mofat, director of operations for the Piano Works Bar in London’s Farringdon and West End districts, told BBC Radio 5 that his business had 104 employees.

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The bars are still closed at the moment, but the company hopes to re-launch them in October in place of strict social distance measures.

The idea is that before customers even enter the club, their temperature will be taken and a special tunnel will be sprayed with disinfectant.

• Epidemic ‘Biggest Knock to Save Music in My Life’

But it depends on lifting restrictions on the audience singing and dancing, as each venue has a six-piece band that plays stop-strip music.

“If we can’t reopen in the short term, we will have a very difficult decision ahead of us,” he said.

‘Mask of Loss’

The impending end of the project is already having an impact on the economy, analysts say.

Compromise service Acus reported that its redundant counseling line had nearly tripled in June and July, as concerns were raised.

Susannah Streeter, a senior investment and market analyst at Hargreaves Lansdowne, said:

“While growth is recovering as lockdown sanctions are eased, it is becoming increasingly clear that the government’s job retention scheme has been hit by the epidemic of jobs and the wider economy.

“As the project strengthens early next month and the government stops paying wages altogether by October 31, we expect the pace of economic recovery to slow as more industry businesses are forced to lay off more workers.”