Quick Overview
For ordinary damage caused by negligence, an employee is liable up to a maximum of 4.5 times their average monthly earnings. The employer must prove that the damage occurred, that the employee was at fault, and that it was related to the performance of work. This limit does not apply to damage caused intentionally, while intoxicated, or after using addictive substances. Special rules also apply to agreements regarding liability for entrusted valuables or items.
Are you unsure whether your employer is justifiably demanding compensation from you? Have your case reviewed by an attorney. In labor disputes, the details often make the difference: what exactly happened, who caused the damage, how the employer quantified it, and whether the employer followed the proper procedure.
What about damage caused intentionally or after quenching one’s thirst with a hoppy beverage during work hours? Can an employee agree in advance to compensate the employer for damages? And under what circumstances does an employee pay compensation to another employee?
The Labor Code, when addressing an employee’s liability for damages, always refers to the employee and the employer. Don’t let this confuse you, however, since a natural person who enters into a contract for work with an employer is also considered an employee. Therefore, even in this case, compensation to the employer is not ruled out.
As mentioned above, an employee ’s liability for compensating the employer for damages is limited. The damage must always be caused by the employee’s fault and in connection with work-related activities.
For example, if an employee on a construction site accidentally cuts an important fiber-optic cable due to his own negligence, his employer must compensate the injured party for the full amount of the damage, and possibly also for lost profits. However, the employer may recover from the employee no more than 4.5 times the employee’s average monthly wage, regardless of how high the damages may be.
In practice, we often see that an employer simply informs the employee of the final amount of the damages and expects payment. But that is not enough. The employee has the right to know what the amount consists of, how it was calculated, and why they, specifically, are held liable for the damage. A common mistake is signing an acknowledgment of debt or an agreement on wage deductions without first verifying whether the employer has actually proven its claim.
If the employer also contributed to the damage, the employee is liable only for a proportionate share of the damage based on the extent of their fault. If multiple employees are liable for the damage, each of them is liable for a proportionate share of the damage based on the extent of their fault.
Further exceptions are provided for by agreements governing so-called material liability or liability for entrusted items. We discuss these below.
However, how is the amount of compensation for damages that an employer may claim calculated? Under the Labor Code, damages represent the actual reduction in the assets of the employer who suffered the damage.
For example, an employer may claim from an employee the costs of repairing a damaged machine or piece of equipment, but only if such costs would not have been incurred by the employer had the damaging event not occurred. For example, if a maintenance technician regularly visits to repair the machine in question, the employer cannot require the employee to cover the cost of that technician’s services.
Tip for article
Tip: In its ruling, the Constitutional Court addressed the relationship between damages and the employer’s obligation to pay compensation. In doing so, it addressed the question of whether a botched organizational change in the workplace and the resulting issuance of several invalid notices of termination should be considered a single error or multiple errors. This has an impact on the application of the limit on compensation for damages to the employer.
However, an employee’s liability for damages is not always that straightforward, and there are certain exceptions. For example , the four-and-a-half-fold limit does not apply if the damage was caused intentionally, while intoxicated, or after using other addictive substances (e.g., marijuana). However, the employer must prove this.
This can be done, for example, by calling witnesses from the “after-work scene”—such as when an employee admits to colleagues after a shift that he cut the cable on purpose to “screw over” the employer. In that case, the employee is liable for the full amount of the damages.
From our experience with labor law cases, we know that the issue of fault is often the most contentious. It is not enough that the damage occurred during a shift. The employer must prove whether the damage resulted from negligence, intent, a breach of a specific duty, or, for example, poor work organization.
Conversely , an employee is not liable for damage caused while averting damage threatening the employer or a danger directly threatening life or health, provided that the employee did not intentionally cause this situation and acted in a manner appropriate to the circumstances. However, we also recommend exercising extra caution here. This is because the employee has a duty to protect the employer’s property. Thus, if, for example, an employee rushing home saw strange smoke rising from a lumber warehouse and did nothing about it, failed to report it, and merely mentioned it that evening at a bar, the employer could indirectly hold the employee liable for the damage caused by the fire (in this case, the employee’s liability for damages is up to three and a half times their average monthly earnings).
Are you solving a similar problem?
Are they refusing to pay you damages?
Have you been injured in a traffic accident, at work, or while playing sports, and is your insurance company refusing to pay? Or is someone else refusing to pay you the compensation you’re entitled to? We can help you.
That's what I want
- When you order, you know what you will get and how much it will cost.
- We handle everything online or in person at one of our 6 offices.
- We handle 8 out of 10 requests within 2 working days.
- We have specialists for every field of law.
Damage Caused by an Employee
The employer is also liable for damage that may be caused to an employee while performing work duties or through any other intentional act. Likewise, the employer is liable for damage caused to an employee by other employees acting on behalf of the employer in violation of legal obligations. An exception is damage to a vehicle that the employee used while performing work duties without the employer’s consent. The same applies to the employee’s tools, equipment, and items necessary for performing work that were used without the employer’s consent.
However, the employer is also liable to the employee for damage to items that are typically brought to work and that the employee set aside while performing work duties. The employee must, however, assert their right to compensation no later than 15 days from the date on which they became aware of the damage.
Some time ago, a court heard an interesting case involving the theft of a car belonging to an employee who, as usual, had used it to drive to work and parked it on her employer’s premises. She had placed the car keys, along with her other personal belongings, in her assigned lockable locker in the changing room, which was used for changing clothes. The locker was broken into. The court concluded that, from the perspective of the employer’s liability for damage to personal belongings left at work, a personal car cannot be considered an item that is typically brought to work. The employer is liable for the employee’s personal car, which she parked in an unguarded parking lot on the employer’s premises, only up to the amount of 10,000 CZK, unless the damage to the car was caused by another employee.
Tip for article
Tip: Traffic accidents are often one of the most common situations in which we deal with compensation claims against an employer or a third party, whether as the injured party or as the party that caused the damage. What are the relationships between the parties involved, and how does the insurance company fit into this? What can you claim, and how should you proceed in such situations?
The employer is obligated to compensate the employee for actual damages. In the case of personal belongings, if an employee brings items to work that they do not normally carry and the employer does not take them into special custody, the employer is liable for damages up to 10,000 CZK. This was precisely the case with that personal vehicle. If it is determined that another employee caused the damage to this item or that the item was damaged while in the employer’s special storage, the employer is still obligated to compensate the employee for the full amount of the damage. However, a security guard at the entrance to the premises or security cameras at the workplace are not sufficient. These do not constitute special custody.
However, if the employee fails to report the damage to the employer without undue delay within 15 days of the date on which they became aware of the damage, this right to compensation for damages expires.
Can your employer deduct the cost of the damage from your pay?
An employer cannot simply deduct compensation for damage from your wages unilaterally. If the damage is to be paid through wage deductions, the employer generally needs a written agreement with the employee. Therefore, you should not sign an agreement on compensation for damages, an acknowledgment of debt, or an agreement on wage deductions simply because your employer presents it to you after an incident.
Before signing anything, verify three things in particular: whether the damage actually occurred, whether you are responsible for it, and whether the amount demanded does not exceed the legal limit. If your employer is pressuring you to sign quickly, that’s a red flag. In such a situation, it’s worth having the document reviewed, because signing it could significantly weaken your position in a potential dispute.
Have you received a draft agreement regarding compensation for damages or wage deductions? Send it to us for review. We’ll let you know if it’s safe for you, what’s missing from it, and whether your employer is asking for more than the law allows.
Summary
Tip for article
Tip: Did you suffer an injury while on the job? What are you entitled to, what is compensation for pain and suffering, and how is it determined? Does the procedure differ if you were partially at fault for the accident due to a breach of your duties? And why is your employer allowed to terminate your employment in connection with a work-related accident? We’ll answer all these questions in our article.
Frequently Asked Questions
Can my employer deduct the cost of the damage from my pay without my consent?
Usually not. A written agreement is generally required for compensation for damages in the form of wage deductions. If you disagree with the amount or the liability, do not sign anything without reviewing it first.
Do I have to sign an acknowledgment of debt for a workplace injury?
You don’t have to. Acknowledging the debt can significantly worsen your position, because by doing so, you are confirming the existence of the debt. Before signing, always verify that your employer has proven the damage, its amount, and your liability.
Does the 4.5-times limit also apply to damage to a company car?
Yes, provided it was a case of ordinary negligence in the performance of work duties. The limit does not apply, for example, in cases of intentional damage or driving under the influence of alcohol or drugs.
Is an employee working under a DPP or DPČ contract also liable for damages?
Yes. The liability rules under the Labor Code may also apply to employees working under a contract for work or a contract for services.
What if the damage was caused by more than one employee?
Each employee is held liable to the extent of their fault. The employer should therefore determine who contributed to the damage and in what way.
