The Fair Work Ombudsman said it had launched Federal Court action against Sydney woman Yi Jeong "Rebecca" Shin and her four companies, including Sushi Bay ACT, for allegedly breaching a number of workplace laws.

The regulator alleges that 163 workers - mostly Korean nationals on student, working holiday and 457 skilled worker visas - across the ACT, NSW and NT were underpaid $656,141 between 2016 and 2020.

It is also alleged that some workers were subjected to a cashback arrangement and that records were falsified.

Ms Shin and Sushi Bay were penalised $124,416 in 2019 for deliberately underpaying 22 workers $18,671 in 2015-16.

Fair Work Ombudsman Sandra Parker said allegations of repeat offending are treated particularly seriously and the regulator was prepared to make full use of the relevant laws to hold individuals and companies to account.

"Employers need to be aware that taking action to protect vulnerable workers and improving compliance in the fast food, restaurant and café sector are priorities for the ombudsman," Ms Parker said.

"We treat cases involving underpayment of young and migrant workers particularly seriously because we are conscious that they can be vulnerable due to factors such as a lack of awareness of their entitlements and a reluctance to complain.

"Any workers with concerns should contact us."

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Fair Work inspectors began their investigations after receiving information from two workers and found what they allege to be "widespread underpayment of entitlements across the Sushi Bay network".

Many of the allegedly underpaid employees were younger than 25 years old and generally worked as cooks, kitchen attendants and in customer service roles.

Most of the alleged underpayments relate to workers across 14 NSW sites while about $13,000 relates to Belconnen and $32,000 to Darwin.

It is alleged that most of the underpayments relate to overtime rates due to a practice of paying flat cash rates of between $14 and $17 an hour for overtime despite workers being entitled to rates of between $25.94 and $48.24 an hour for overtime work.

It is alleged that minimum wage rates, weekend and public holiday penalty rates and annual leave entitlements were also underpaid and that the companies knowingly made, kept or used false or misleading records.

Ms Shin is alleged to have approved and overseen the payment practices for the Sushi Bay outlets and that she was involved in a number of breaches of workplace laws, including some serious ones.

The ombudsman is seeking penalties against Ms Shin, Sushi Bay, Sushi Bay ACT, Auskobay and Auskoja for numerous alleged breaches.

If proven, the alleged systemic and repeated nature of the conduct means that some of the breaches are serious ones under the Protecting Vulnerable Workers Act and therefore attract 10 times the maximum penalties that would ordinarily apply.

For the serious breaches, Ms Shin faces penalties of up to $126,000 per breach and her companies face penalties of up to $630,000 per breach.

The ombudsman is also seeking court orders requiring the companies to fully rectify the underpayments, which remain outstanding.

Ms Shin and Sushi Bay have been contacted for comment. A first directions hearing in the Federal Court has not yet been listed.

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