In this article the author analyzes the theoretical and the practical issues about bringing of the employee and employer to material responsibility according to the norms of the labor legislation of Ukraine. Particular attention is paid to the issues that disrupt the balance of the legitimate rights and interests of employees and employers during application of legislation, that regulates the material responsibility of employees and employers. Besides, in the article the author draws attention to the need to improve the mechanism for determining the amount of damage caused to the employee and employer. Some problems of practical application of legislation governing liability are analyzed. Also in this article some proposals about improvement of the legislation on material responsibility are criticized.