NSW businesses would have to display minimum wage rates and faced being named and shamed if they underpaid workers under NSW Labor Party policy.
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The NSW ALP will on Monday announce a policy to place businesses that breach fair work laws on a public "name and shame" register and disqualify them from getting any NSW government contracts.
Labor would also have disputes over apprenticeships and vocational training regulated by state law heard in the Industrial Relations Commission.
The announcement is part of the Labor Party's industrial relations platform to eliminate the exploitation of vulnerable workers.
As announced at the NSW party conference last week, the policy plan will include jail terms of up to 14 years for unscrupulous employers engaged in wage theft from employees.
On Monday, a requirement for businesses to display minimum wage rates with their business registration for patrons and prospective employees to see will be added to the policy.
Businesses found to have breached the law would be put onto a public "name and shame" register and be ineligible for any NSW government contracts.
Labor's industrial relations spokesman Adam Searle said the policy was in direct response to Fairfax Media's exposure of students being paid as little as $10 an hour or, in same cases, nothing for work in Wollongong restaurants and cafes.
The systemic underpayment was identified by Wollongong University student Ashleigh Mounser with the support of the South Coast Labour Council, which also contributed to the policy discussion.
"We hope that having to display the wages they pay their staff in public will act as a disincentive for businesses to underpay their workers," Mr Searle said.
"Failure to comply or providing false information will open them up to penalties.
"Being locked out of access to doing business with the state [government] for breaching fair pay laws is not only a powerful incentive for companies to properly pay their workers, it also sends a clear signal to the market about the need to behave properly towards staff."
Opposition Leader Luke Foley said vulnerable young workers were being cheated out of "a staggering amount of wages by unscrupulous bosses".
"And it has to stop," he said. "We'll go after that minority whose business model is based on exploitation."
Ms Mounser said she welcomed NSW Labor's response to the problem of students and other vulnerable workers being underpaid.
"I'm really happy with the outcome," she said. "My point has always been that it's a fixable problem. We just needed someone to be interested in fixing it.
"Hopefully business owners will take the minimum wage more seriously than they have."
The Australian Industry Group said the debate about workplace relations in Australia at a state level was at risk of heading down a "dangerous path".
AIG chief executive Innes Willox said civil penalties were already in place to deal with businesses that deliberately underpaid workers. The federal government also had a bill before the Parliament to increase these penalties by up to 20 times.
He said the proposal by the NSW and Queensland ALP to impose jail terms for employers and business owners lacked fairness and balance.
"The last thing that is needed is for the retrograde, anti-business proposals of the union movement to be adopted by mainstream political parties," Mr Willox said. "Legislative changes need to be in the national interest, not just in the union movement's narrow interests."
