About 1600 hair and beauty salons in NSW, Victoria and Queensland will be randomly audited over the next 12 months after previous audits showed more than half of salons failed to comply with workplace laws.
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The retail, hair and beauty salons will be targeted by Fair Work inspectors because they employ high numbers of young people and workers from migrant backgrounds.
"In 2013, the Fair Work Ombudsman released the results of a national hair and beauty campaign, which identified an overall industry non-compliance rate of 55 per cent," Acting Fair Work Ombudsman Michael Campbell said said.
"Victoria recorded the highest rate of non-compliance, with almost three quarters of salon operators audited not meeting their obligations under workplace laws."
Mr Campbell said $585,000 was returned to 755 retail industry workers under a previous national Fair Work campaign.
"Our 2012 report revealed that more than 40 per cent of the underpayments identified through the campaign were owed by NSW employers," Mr Campbell said.
"This new hair, beauty and retail campaign will build on our previous work to reinforce the need for all workplace participants to proactively ensure they are meeting their obligations under Australian workplace laws."
A new union for hairdressers has formed in response to complaints about high levels of wage theft in the industry.
The union, Hair Stylists Australia, is preparing to fight a threatened reduction of weekend penalty rates for hair and beauty salon employees.
The Australian Industry Group has filed an expression of interest on behalf of employers to the Fair Work Commission for a review of weekend penalty rates under the Hair and Beauty Industry Award 2010.
Newcastle hairdresser Melanie Coombes, who has joined Hair Stylists Australia, said hairdressers were already "paid peanuts" and struggled to pay their bills.
"We are already one of the lowest-paying industries and they want to take away our penalty rates," she said.
The Fair Work Commission in February decided to reduce Sunday penalty rates in the retail and hospitality industries and it invited interested parties to make submissions to its planned review of rates in the hair and beauty industry.
Australian Workers Union National Secretary Daniel Walton said wage theft was rampant in the hair and beauty industry.
The AWU passed a resolution to trial an alternative model of union organising in the hair dressing industry, which represents more than 60,000 mostly female workers at its annual conference last month.
In responses to AWU focus groups, hairdressers have complained they are increasingly being treated as independent contractors, with some required to rent a chair or space in a salon instead of being paid a wage. Some who receive wages reported they were not receiving any penalty rates on weekends.
