Revelations less than half the Wollongong businesses raided by Australia's workplace watchdog were obeying the law shows "wage theft and lawlessness on a massive scale", the head of the South Coast Labour Council says.
The Fair Work Ombudsman (FWO) this week revealed it had recovered almost $130,000 for 458 employees at 36 businesses after conducting surprise audits at workplaces across the city.
South Coast Labour Council secretary Arthur Rorris said the FWO action "confirmed what we all know".
"That wage theft is rampant and it's a scourge in our community," Mr Rorris said.
However, the union leader also labelled the response "pathetic".
"They're expecting us to believe that after months in preparation and all of those businesses raided that the most they could get back was $130,000," he said.
"Let's put this in perspective; we currently have one case in the federal court for two workers for $500,000.
"I have personally raised half that much money for eight workers, half the amount the government's departmental arm has been able to do - $130,000 - over the whole region. It's a joke."
Wollongong was one of three locations targeted by Fair Work inspectors, given its high population of university students and the large number of anonymous tip-offs received from workers.
Inspectors audited 97 businesses in the city, with only 38 per cent found to be complying with workplace laws.
The raids targeted takeaway food outlets, cafés and restaurants, accommodation providers, pubs and bars, and retail businesses.
In total, 489 businesses were audited in Wollongong, Albury-Wodonga and Ballarat. Almost half of them were not compliant.
The most common breach identified was employers not paying their staff correctly, either by underpaying the minimum hourly wage or not paying correct penalty rates.
Other breaches included not providing proper pay slips.
The FWO issued 16 formal cautions, 37 on-the-spot fines and two compliance notices in Wollongong.
Fair Work Ombudsman Sandra Parker said: "We are committed to improving workplace compliance in the hospitality industry."