The federal government has moved to stamp out widespread underpayment and coercion of workers, such as recent cases involving 7-Eleven franchisees.
Cabinet minister Peter Dutton on Wednesday introduced to parliament a bill that proposes higher penalties for serious, systematic and deliberate contraventions of workplace laws relating to payments.
It will also make it illegal for employers to ask for cash back from employees.
The penalties for breaches will be 10 times higher than usual, although they are not intended to target those who make genuine record-keeping mistakes.
"It is of concern to this government that instances where some young workers have been led from their workplaces to the nearest ATM and forced to hand back part of their wages in cash," Mr Dutton told MPs.
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"Our amendments make it clear that his type of practice make it unlawful and employees can get their wages back."
The draft laws also ensure franchisors and holding companies are held responsible for underpayments "where they turn a blind eye or were complicit in such a breach".
The Fair Work Ombudsman's powers will also be strengthened to make sure the exploitation of vulnerable workers can be effectively investigated.
Late last year, hidden footage emerged showing employees at a Brisbane 7-Eleven being forced to hand back their pay.
It followed a Fairfax-ABC investigation that revealed some franchisees systematically underpaid international students, who were threatened with deportation if they reported it.
