How to recover money for unduly paid maternity/parental leave

How errors arise and the payroll department’s liability

The payroll department is a key part of this administrative chain, because it is the employer—through its reporting—that defines the parameters for the calculation. If payroll states the decisive period incorrectly, fails to include all income, or, conversely, fails to exclude days when the employee did not work, the OSSZ will calculate the benefit incorrectly.

The attorneys at ARROWS advokátní kancelář have many years of experience with this issue and handle situations where payroll departments later identify discrepancies in the documentation. The legal framework under the Czech Sickness Insurance Act is strict, and if the overpayment arose because the employer confirmed incorrect data, the employer is obliged to reimburse the overpayment.

The legal obligation to repay the money and the 5-year time limit

Once the OSSZ finds that it paid a benefit without entitlement or in a higher amount than was due, it will initiate overpayment proceedings. This obligation follows directly from the Czech Sickness Insurance Act.

The key information for 2026 is the length of the period during which the state may recover the money, with the right to recover an overpayment expiring only 5 years after it was paid out. This means the OSSZ may carry out an audit and assess an overpayment even for benefits paid several years ago, which may involve amounts in the tens to hundreds of thousands of Czech crowns.

The law distinguishes fault:

• Fault of the recipient (the employee): If she obtained the benefit fraudulently, concealed decisive facts, or accepted it even though she must have known she was not entitled to it (i.e., lack of good faith).
• Fault of the employer: If the overpayment arose because the employer failed to submit the prescribed report or submitted a report with incorrect data (Section 118 of the Czech Sickness Insurance Act). In such a case, the OSSZ will decide that the employer is obliged to reimburse the overpayment.

In practice, this often looks like the mother spent the money in good faith and the OSSZ later finds that the error was in the payroll documentation. Since the mother acted in good faith, the state will not seek the money from her, but will issue a payment assessment directly to the employer.

Risk table and legal consequences for employers

The role of the employer, OSSZ and the payroll department

Formally, the process is clear: the employer submits data, OSSZ decides and pays. In the reality of 2026, when most communication is automated via VREP/ePortál, errors become harder to detect with the human eye.

Under Czech law, the employer is responsible for the accuracy of the data and cannot avoid liability by claiming that the error was caused by an external accountant. In relation to the state, the employer is the counterparty, and if an external accountant makes a mistake, the employer must pay the state and then recover the damage from the accounting firm through private-law means.

A typical scenario arises when an employee works under an agreement to perform work (DPP) above the threshold for participation in insurance while receiving maternity benefit (PPM) from the same employer.

The payroll department forgets to report this concurrent activity or to pay insurance contributions from it, which OSSZ discovers during a cross-check. The result is that the employee was not entitled to PPM, an overpayment arises, and the employer bears the blame because it allowed the work to be performed and failed to report it.

The attorneys at ARROWS, a Prague-based law firm, can in these cases determine the degree of fault and assist in defending against an authority’s automated approach. It often happens that OSSZ proceeds too automatically and does not take into account the specifics of the given case.

Protective period and specifics for a subsequent child

A complex area is the so-called protective period, which serves to ensure that a woman whose employment ended during pregnancy still has entitlement to PPM under Czech law.

For women whose insurance ended during pregnancy, the protective period is 180 days from the date the insurance ended. However, if the insurance lasted for a shorter period, the protective period is only as many days as the insurance lasted. Payroll accountants often make the mistake of automatically counting 180 days without verifying the duration of the employment relationship.

If the employer confirms in the forms that the protective period applies even though the conditions were not met, and OSSZ pays the benefit on that basis, an overpayment arises attributable to the employer.

Another risk arises with back-to-back maternity benefits, where the daily assessment base for the first child must be compared with the probable or actual base for the second child. The aim is to use the base that is more favourable for the mother, provided the employment relationship still continues.

The repayment process

The recovery process by OSSZ is a formalised administrative procedure in the Czech Republic, usually beginning with a notice of commencement of proceedings regarding the overpayment. At this stage, the employer has the right to inspect the file and comment on the underlying documents.

This is followed by the issuance of a decision imposing an obligation to repay the overpayment, against which an appeal may be filed within 15 days of delivery. The appeal is then decided by the Czech Social Security Administration (ČSSZ).

Many companies make the mistake of ignoring the initial notices or trying to resolve the matter by phone, which carries no legal weight. Once the appeal deadline passes, the decision becomes final and enforceable.

The attorneys at ARROWS, a Prague-based law firm, recommend entering the proceedings immediately upon receipt of the first notice. At this stage, it is often possible to explain the facts, document the correctness of the data, and have the proceedings discontinued even before a payment assessment is issued.

Internal responsibility and damages compensation

When a company has to pay the state an overpayment (damage), management logically looks for the party at fault internally, and this is where the Czech Labour Code comes into play.

If the error was caused by a payroll accountant employed under an employment contract through negligence, they are liable for damages up to a maximum of 4.5 times their average monthly earnings. If the damage was caused intentionally, which is rare, this cap does not apply.

The process requires discussing the damage with the employee and a written acknowledgement of the debt, or filing a lawsuit in court. Note that limitation periods also apply here under Czech law, so recovery should not be delayed.

ARROWS attorneys in Prague can assist with drafting an agreement on compensation for damage or assessing whether a breach of obligations actually occurred.

Prevention of future errors

Prevention is cheaper than court disputes, and therefore in 2026 automated checks in payroll systems should be the standard.

1. Dual control of data: Data sent to OSSZ (NEMPRI) should not be submitted without review by a second person, especially in non-standard cases.

2. Archiving submitted documents: Keep electronic filing confirmations for at least 10 years for pension insurance purposes and potential inspections in the Czech Republic.

3. Training: Legislation changes, so ensure regular training for payroll accountants regarding the current interpretative positions of the Czech Social Security Administration (ČSSZ).

The attorneys of ARROWS, a Prague-based law firm, can carry out an audit of your employment-law processes under Czech legislation and set up a compliance system to minimise the risk of errors.

Conclusion

Recovery of unduly paid maternity or parental benefits is a legally complex situation combining the Czech Administrative Procedure Code, the Sickness Insurance Act and the Labour Code. The five-year time limit for assessing an overpayment means that the company carries this risk over the long term.

If you are dealing with a notice from the OSSZ (District Social Security Administration) or suspect an error in your payroll department, it is sensible to consult experts before the decision becomes final and binding. Contact ARROWS advokátní kancelář at consultation@arws.cz.

Read also:

• Czech Labour Inspections 2026: Compliant Pay, Bonuses and Transparency
• Essential Employment Law Training for Czech Payroll Specialists
• Avoiding HR Litigation and Common Legal Misconceptions in Czech Employment Law
• Digital Inspections and AI in 2026: New EU Compliance Duties for Firms
• New EU Pay Transparency Directive: Key Obligations for Czech Employers by 2026