Businesses have been forced to pay back almost half a million dollars to 616 workers following Fair Work ombudsman audits of the hospitality industry in Melbourne, Sydney and Brisbane that found 72% of businesses had breached workplace laws.

Fair Work inspectors visited 243 businesses on Victoria Street in Melbourne’s Richmond, Glebe Point Road in Sydney’s Glebe and at Fortitude Valley in Brisbane. They interviewed staff and checked employment records, issuing 71 on-the-spot fines and 63 formal cautions, and finding workers were owed $471,904.

Of the businesses found in breach of workplace laws, 38% underpaid their staff, while 28% failed to keep adequate employment records and pay slips. Failure to pay overtime or to give staff adequate meal breaks were other common issues.

The ombudsman began legal action against several of the businesses, including the Meatball & Wine Bar, where 26 employees at its three Melbourne restaurants were allegedly underpaid. Employees of the franchise, who worked as wait staff or kitchen hands, were paid flat rates of between $17.31 and $21.69 per hour.

The Fair Work ombudsman, Natalie James, said she was disappointed by the high level of non-compliance, but not surprised. One in 10 disputes resolved by the ombudsman last financial year involved a restaurant, a cafe or a takeaway food outlet, and nearly one-third of the most serious cases the ombudsman takes to court involves the sector.

“Our experience is that addressing entrenched, cultural non-compliance requires a combination of regulatory intervention, public awareness and industry leadership,” James said.

“This is an industry-wide problem and it needs an industry-wide response. There are over 50,000 cafes, restaurants and takeaway outlets in Australia, and the Fair Work ombudsman cannot fix this one cafe at a time.”

The audits found the non-compliance rate was the highest on Victoria Street, with breaches identified at 81% of businesses, compared with 70% (47 of 67) on Glebe Point Road and 60% (44 of 73) at Fortitude Valley.

A separate ombudsman audit of the hospitality sector is currently under way. That audit began in April, and will target 1,000 businesses across the country. Companies found to be in serious breaches of laws will face penalties of up to $630,000 per contravention. The maximum penalty for individuals is now $126,000 per contravention. Failing to keep employee records or issue pay slips attracts a penalty of up to $63,000 for a company and $12,600 for an individual.