Over 450 workers from 36 Wollongong businesses were dudded about $130,000.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
This money has since been back-paid after surprise audits conducted by the Fair Work Ombudsman.
Fair Work Inspectors also targeted businesses in Albury-Wodonga and Ballarat, recovering $331,386 in wages for 725 underpaid workers.
Wollongong and the two other regions were targeted because of the high population of university students and large number of anonymous reports Fair Work received from local workers.
In total, 489 businesses were audited, including take-away food outlets, cafes and restaurants, retail businesses, pubs and bars.
Only 38 per cent of the 97 Wollongong businesses audited complied with Australian workplace laws.
It was the worst of the three regions, with 59 percent of businesses in Albury- Wodonga fully compliant with workplace laws and 54 per cent in Ballarat.
The most common breach identified was businesses not paying their staff correctly, either by underpaying the minimum hourly wage or not paying correct penalty rates.
Other breaches included businesses not providing staff with proper pay slips and failing to comply with record-keeping requirements.
Over half (55 per cent) of the total money recovered during the audits came from hospitality businesses, with 67 employers back-paying $181,557 to 573 employees.
Fair Work Ombudsman Sandra Parker said the findings highlighted that young workers are particularly vulnerable to receiving below minimum wages and conditions.
"Like many workers in the hospitality industry, young workers in these regions were potentially vulnerable due to their age, visa status and reliance on local jobs to support themselves," Ms Parker said.
"Australia's minimum pay rates are not negotiable, and employers in the fast food, restaurant and café sector need to actively check that they are paying their staff correctly before we visit their business."
In response to the breaches, the FWO issued 35 formal cautions, 37 on-the-spot fines and nine compliance notices.
Wage back payments made by businesses ranged from $7.26 up to $40,434.69.