A Tasmanian retailer has allegedly underpaid five staff members, all 417 visa holders, a total of $42,985.

The 417 is a temporary visa issued by the Department of Immigration and Border Protection (DIPB) to young people who want to holiday and work in Australia for up to two years.

Harold William Jackson, owner of Harold’s Glass and Hardware and the adjacent Rhythm and Vines café in Queenstown, allegedly paid one staff member just $1.35 an hour.

The female Italian backpacker, in her 20s, allegedly agreed to work for Jackson in September, 2013 after he promised to sign off on her second year 417 visa application, and was allegedly paid $270 for four weeks’ work.

Jackson allegedly also underpaid four other backpackers from the UK and Japan.

Individual underpayments allegedly range from $1026 to $19,097.

Documents lodged by the Fair Work Ombudsman with the Federal Circuit Court allege the backpackers worked for Jackson for periods ranging from one week to four months and received irregular payments equivalent to rates of between $2.43 and $5.38 an hour.

Two of the backpackers were allegedly recruited through advertisements Jackson placed on the Gumtree website stating that “88 day second year work visa sign off is available”.

The Fair Work Ombudsman says the backpackers were entitled to be paid more than $22 an hour for normal hours worked and up to $32 an hour for some weekend work.

The backpackers were allegedly underpaid for various periods of time worked between July, 2013 and February, 2014.

Jackson engaged them to perform duties including sales, cleaning, labouring and construction.

The Fair Work Ombudsman investigated the matter after receiving a complaint from one of the backpackers.

It is also alleged that Jackson breached pay slip and record keeping laws.

Fair Work Ombudsman, Natalie James, says inspectors made extensive efforts to engage with Jackson to try to resolve the matter without going to court, but were unable to secure sufficient cooperation.

Jackson allegedly told Fair Work inspectors that the backpackers were “guests” or “volunteers”, rather than employees.

He also allegedly failed to respond to a contravention letter issued in June requesting that the underpayments be rectified.

He faces maximum penalties of up to $10,200 per contravention.

The Fair Work Ombudsman is also seeking a Court Order to have the workers back paid in full.

Employers and employees seeking assistance can visit www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94.