The investigation found 26 of 36 Bendigo retailers failed to pay their workers correctly. More than $32,000 of unpaid wages was recovered from those stores, with one business owing $19,495 to three employees.

The Ombudsman report showed Bendigo, with 72 per cent of stores underpaying staff, was almost three times higher than the national average of 26 per cent in breach of fair pay.

Most of the issues the Fair Work Ombudsman found were attributed to confusion over the “modern” award system.

“Many employers underpay as a result of the lack of information, or they make mistakes interpreting the information they have,” Fair Work Ombudsman Nicholas Wilson said.

Another common theme the report found was employers not paying fixed penalties or loading rates.

Mr Wilson said the recent audits would help ensure businesses don’t accumulate huge debts to their workers.

“Our proactive work helps improve understanding among employers of their workplace responsibilities,” he said.

Of 1866 employers audited around the country, 492 recorded a total of 653 contraventions, underpaying wages, failing to conform with payslip requirements, and failing to meet time and wage requirements.

Victoria was the worst offending state, with $153,820 of wages and entitlements recouped for 187 staff.

Bendigo businesses found in breach of payments have so far complied with Fair Work Australia.

“The businesses have cooperated, voluntarily back-paid the workers and put processes in place to ensure it doesn’t happen again,” Fair Work adviser Richard Honey said.