Illawarra bottle shops have been identified as the worst in the state when it comes to complying with workplace laws and paying workers correctly.
The liquor stores were audited by Fair Work and only 29 per cent of businesses were found to be compliant, with the rest contravening federal workplace laws on wage recording, paying penalty rates and record-keeping.
This was below the statewide liquor store compliance rate, where 56 per cent of the 178 audited stores were compliant with the General Retail Industry Award 2010.
Additionally, Fair Work inspectors identified five Illawarra businesses that had underpaid 18 employees a total of $23,815.
This represents almost a quarter of underpaid bottle shop wages in NSW, which totalled $107,406 for 133 employees at 45 businesses.
The main reason for the underpayments was a lack of awareness of award provisions by employers, who were paying flat hourly rates without taking into account appropriate penalties and loadings.
Each year, the Fair Work Ombudsman runs targeted campaigns focused on different industry sectors as part of a proactive compliance program.
Ombudsman Natalie James said when liquor store contraventions were identified, most employers were quick to rectify the issues and accepted help to ensure they were not repeated.
"The receptive attitude by most employers was encouraging, and all contraventions were voluntarily rectified," her report notes.