A total of 22 employees were allegedly underpaid more than $83,000.
Many are international students from non-English speaking backgrounds – a third of them aged under 21.
Facing court is Primeage, which operates a Gloria Jeans franchise at Caulfield, and company directors, Tsinam Fuand and Ping Ostrovskih.
The Fair Work Ombudsman has commenced legal proceedings in the Federal Circuit Court in Melbourne.
Court documents allege that the casual employees were underpaid a total of $83,566 between July, 2011 and April, 2013.
They were allegedly paid flat rates of $8 to $10 an hour.
The Fair Work Ombudsman claims this has resulted in underpayment of their minimum hourly rates, weekend and public holiday penalty rates, casual loadings, minimum shift pay, and a clothing allowance.
Breaches of laws relating to issuing of pay slips, providing meal breaks and keeping employment records are also being alleged.
The Fair Work Ombudsman discovered the alleged underpayments when it investigated a complaint lodged by one of the employees.
Individual amounts owing to the employees range from a low $45 up to $17,103, Court documents allege.
Fu and Ostrovskih face maximum penalties ranging from $3300 to $10,200 per breach and Primeage faces penalties ranging from $16,500 to $51,000 per breach.
The Fair Work Ombudsman is also seeking a court order for the company to rectify the underpayments in full.
Fair Work Ombudsman Natalie James says the employer’s failure to rectify the alleged underpayments – despite efforts by inspectors to resolve the matter – was a significant factor in the decision to put the matter into Court.
“The Fair Work Ombudsman is keen to ensure that overseas workers in Australia are treated with dignity and respect and accorded the same rights as local workers. Indeed, that is the law,” James said.
A directions hearing is scheduled for April 7.