From 1st September 2020, the government will pay 70% of wages up to a cap of £2,187.50 a month. Employers are already paying employees' pension contributions and National Insurance, but will now have to pay 10% of salaries as well.
The increased cost of the scheme poses a problem for many employers, who face difficult decisions about whether to make staff redundant.
Craig Beaumont of the Federation of Small Businesses told the BBC's Today programme that one million small employers across the country had used the furlough scheme. He also stated that 23% of small employers were considering reducing their headcount in the next three months.
The furlough scheme has assisted many employers in maintain their workforce during the pandemic. However, it seems that with the ending of the scheme in sight (31st October 2020), there may soon be a need for employers to make redundancies, and this will inevitably begin to impact the economy.
The question is, will the Government will give in to pressure from businesses to extend the furlough scheme?
Companies using the government's coronavirus furlough scheme are now having to contribute to workers' wages.