How to recover money for unduly paid maternity/parental leave: Legal risks for the payroll accounting department

Mgr. Jan Pavlík
Mgr. Jan Pavlík
4.3.2026 | ARROWS law firm

Working in payroll involves risks related to the payment of benefits. The District Social Security Administration (Okresní správa sociálního zabezpečení) may claim compensation for damages for incorrectly paid maternity benefit (peněžitá pomoc v mateřství) under Czech legislation. These situations are not uncommon, and in 2026 they are easily detectable thanks to the digitalisation of public administration in the Czech Republic.

The photo shows a lawyer consulting on compensation for benefits.

Quick summary

  • Errors in determining maternity benefit (peněžitá pomoc v mateřství, “PPM”) most often arise from incorrectly reporting the start date of maternity leave, incorrectly stating the assessment base, or incorrectly assessing the protection period under Czech legislation.
  • Liability for an overpayment rests with the party that caused it. If the employer (the payroll department) provided incorrect supporting documents, the District Social Security Administration (OSSZ) will pursue reimbursement of the overpayment directly from the employer in the Czech Republic.
  • Under Czech law, the limitation period for the state to recover an overpayment is 5 years.
  • The assumption that only the state (OSSZ) or the employee is liable is a common mistake that can result in payment assessments and sanctions for the company.

How errors arise and the payroll department’s liability

In everyday practice, overpayments of maternity benefit (PPM) most commonly occur in more complex HR situations—for example, when an employee transitions directly from parental leave to another maternity leave. These are precisely the moments when there is room for error when completing the attachment to the benefit application (NEMPRI). Maternity benefit is calculated as 70% of the daily assessment base, which the OSSZ determines based on data provided by the employer.

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.

Related questions on how errors arise

1. Who is liable for the OSSZ paying money by mistake—the employer or the OSSZ?
It depends on who caused the error. If the OSSZ calculated correctly but relied on incorrect figures from the employer, the employer is liable (Section 118(1) of the Czech Sickness Insurance Act). If the employer provided everything correctly and the calculation error was made by an official, the state is liable.

2. What data must the payroll department report to the OSSZ?
The employer must report, on the prescribed forms (typically electronically), the start of maternity leave, the assessment bases for the decisive period, and excluded periods. Any change (e.g., an early return to work) must be reported without delay, no later than within 8 days.

3. Is it a problem if the employee herself did not state that she returned to work?
Yes, it is a problem. The employee has a notification duty, but the employer has a duty to keep attendance records and report changes that affect benefit payments. If an employee works while also receiving PPM (for the same activity), an overpayment arises, for which both may be jointly and severally liable, or the party who had the duty to report and failed to do so.

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.

Related questions on the obligation to repay an overpayment

1. Can I contest repayment if I claim the error was not my fault?
Yes, within the administrative proceedings. You must prove that the data sent to the OSSZ reflected the facts at the time and that the error occurred elsewhere (e.g., on the authority’s side or on the employee’s side, if she withheld material information from you).

2. What is the deadline by which I must repay the money?
After the decision on the overpayment becomes final, the OSSZ will set a payment deadline, usually within a matter of weeks. However, the key point is the 5-year preclusive period during which the authority may assert the claim.

3. If the employee cannot repay, who pays then?
If the fault lies with the employer (incorrect reporting), the OSSZ will recover the amount directly from the employer, regardless of the employee’s financial situation.

Risk table and legal consequences for employers

Risks and sanctions

How ARROWS can help (office@arws.cz)

Recourse reimbursement of an overpayment: The District Social Security Administration (OSSZ) will issue a decision imposing on the employer an obligation to pay the amount that was unduly paid to the employee.

Representation in administrative proceedings: Our Czech legal team at ARROWS, a Prague-based law firm, will file objections or an appeal against the OSSZ decision and verify whether the authority’s claim is justified and correctly calculated under Czech law.

Misdemeanour penalty: In addition to repaying the overpayment, you may face a fine for failure to comply with notification obligations or for incorrect record-keeping under Czech legislation.

Minimising sanctions: ARROWS experts represent you in dealings with the authorities in the Czech Republic, help remedy the situation, and argue for a reduction or waiver of the penalty.

Internal company damages claim: If the damage was caused by a payroll accountant, a complex employment-law relationship arises regarding recovery of damages from the employee.

Legal analysis and enforcement of the claim: ARROWS, a Prague-based law firm, will set up the process for recovering damages from the responsible employee in accordance with the Czech Labour Code, or from an external accounting firm under the Czech Civil Code.

Lack of records: Missing electronic proof of data submission (NEMPRI, ELDP) puts you in an evidentiary disadvantage.

Documentation review: We review your processes and help secure evidence demonstrating that you fulfilled your obligations on time.

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.

Related questions on liability

1. If OSSZ admitted that the error was also on its side, do I still have to pay?
If the error is exclusively on the authority’s side, you do not have to pay. If fault is shared (you provided incorrect numbers and the official copied them without checking), the authority often insists on the employer’s responsibility for the primary data. Legal defence is necessary here.

2. How can I tell whether my payroll department proceeded correctly?
The key is the submitted XML files and the delivery confirmations to the OSSZ ePortál. The data in the payroll system must match the data submitted to the state.

3. Can I seek compensation from an external accountant?
Yes, based on the service agreement. The 4.5-times-salary cap applicable to employees does not apply here; liability is up to the full amount of the damage (unless agreed otherwise in the contract).

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.

Related questions on the protective period

1. When the employment of a pregnant employee ends, what do I have to report?
Standardly, deregistration from insurance. In the forms, it is appropriate to state that the employment ended during pregnancy; however, the assessment of entitlement to the benefit and the protective period is primarily for OSSZ, based on data on the length of employment.

2. What happens if the mother returns to work, but the fixed-term contract has meanwhile ended?
If the employment has ended, the employer no longer processes PPM or submits documents for another child (unless the protective period applies). The mother must address the situation directly with OSSZ or the Labour Office in the Czech Republic.

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 office@arws.cz.

FAQ – Most common legal questions on repayment of an overpayment

1. Can the OSSZ demand repayment without a written decision?
No. To impose an obligation to repay an overpayment, the OSSZ must issue a formal decision (an administrative act). A mere “request” by letter is not an enforceable title, but it often precedes the issuance of a decision.

2. What are my options if I disagree that the error was on my side?
You must file an appeal against the OSSZ decision within 15 days of delivery. In the appeal, you must state the reasons (factual and legal) and evidence. If you are unsuccessful with the ČSSZ, you may file an administrative action with the Regional Court in the Czech Republic. Contact us at office@arws.cz.

3. What if the employee cannot return the money because she has already spent it?
If the employee acted in good faith (she did not know about the error), she does not have to return the money. In such a case, the state recovers the overpayment from the party that caused the error—typically the employer, if it provided incorrect documents.

4. How long do I have to recover the money from the payroll accountant (employee)?
A claim for damages against an employee becomes time-barred within the general limitation period under the Czech Civil Code (a subjective period of 3 years), but the procedures under the Czech Labour Code must be followed. We recommend addressing this without delay.

5. Can I be fined if it is found that I reported incorrect data to the OSSZ?
Yes. For failure to comply with the notification obligation or for incorrect reporting, the OSSZ may impose a fine of up to CZK 20,000; in the case of repeated or serious conduct, even higher (up to CZK 500,000 for obstructing cooperation). Contact office@arws.cz for legal representation.

6. Is my external accountant insured for such errors?
Professional accountants should have professional liability insurance. However, it is necessary to check the service agreement and the insurance terms and conditions. Recovery of damages from an external provider is a civil-law dispute in the Czech Republic.

Notice: The information contained in this article is of a general informational nature only and is based on the legal situation in force as of 2026. Legal regulations and their interpretation may change. To address your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz).

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