Cleaners working at the retail icon Myer say they are being underpaid and denied entitlements through an illegal practice known as sham contracting.

The ABC's 7.30 program has spoken to Myer cleaners who allege they are paid below the award rate, do not receive penalty rates and are left to pay their own tax, superannuation and insurance.

Myer has previously vowed to ensure cleaners are paid properly after being made aware of the same problem occurring at its stores earlier this year.

It has deflected these latest questions about the practice to its cleaning contractor Spotless.

The Fair Work Ombudsman is currently investigating underpayments of workers at various Myer stores.

The retailer contracts its cleaning services to Spotless, which in turn hires cleaning subcontractors.

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David, a cleaner at Myer's flagship Melbourne store who has asked 7.30 to conceal his identity because he fears losing his job, said he gets paid a flat rate of $20 per hour by a Spotless subcontractor called INCI Corp.

"It doesn't matter if it's weekends, or holidays, late hours, long hours, it's all just a flat rate," he said.

Cleaners working casual hours are supposed earn between $23 and $25 per hour, more at night and in the early morning, and up to double the award rate on Sundays.

Law does not spell out difference between contractor, employee

Jess Walsh from the cleaners union United Voice said Myer and Spotless should accept responsibility.

"Myer is sitting at the top of a chain of real exploitation," she said.

"They can't just [award] the contract and then put their head in the sand and forget about it."

The union believes the cleaners have fallen victim to sham contracting, a practice prohibited by the Fair Work Act.

"Sham contracting is when employers hire somebody on an ABN instead of taking them on as a direct employee," Ms Walsh said.

"And they do that in our experience to avoid paying the correct hourly rate of pay."

University of Adelaide employment law professor Andrew Stewart said the Fair Work Act made it clear that sham contracting is illegal.

But he said because the difference between an independent contractor and an employee is not spelled out in the law, courts usually apply a test to determine whether a contractor is in fact an employee.

"If you're subject to a lot of control in your work, if you're wearing somebody else's equipment or driving a van with somebody else's logo, if you're not free to delegate work to other people, and most... tools and equipment are supplied, then the chances are you're an employee," he said.

'I just had to go onto an ABN'

Myer and Spotless both declined to speak to 7.30 about the matter, but both supplied statements.

"Cleaners for Myer stores are provided by Spotless and we have sought a full and urgent explanation about the matter raised by the ABC," Myer's statement said.

"If we need to, we will take any further steps that are necessary to ensure Myer's high standards continue to be upheld."

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Spotless said the allegations would be thoroughly investigated.

INCI Corp's owner Mehmet Mesli told 7.30 that his company had about 60 cleaners working as contractors at nine Myer stores around Melbourne.

He said they had all asked to work on ABNs, and he would happily hire them as employees if they asked.

But David said when he applied for the job he was given no option but to work as a contractor.

"I just had to go onto an ABN otherwise I wouldn't have the job," he said.

In July, the Fair Work Ombudsman forced a previous sub-contractor to pay $6,300 to cleaners working at Myer stores who were underpaid.

"The Fair Work Ombudsman has for some time held concerns about the workplace practices, including allegations of underpayment of workers, by cleaning contractors engaged by Myer at various sites," the Ombudsman said in statement.

"The Fair Work Ombudsman has held a number of meetings with Myer and invited Myer to work with us to address any issues of non-compliance within their supply chain."

The Ombudsman's investigation is ongoing.

Watch the full report on 7.30 tonight on ABC.