At the office of Fair Work Ombudsman Sandra Parker, the flood of companies rushing to declare that they have underpaid their workers has become a torrent – a torrent that she admits she might need more money to deal with.

Speaking to Guardian Australia this week after supermarket giant Woolworths admitted to underpaying staff by as much as $300m over almost a decade, Parker says it felt like big companies were coming forward almost weekly to declare their wrongdoing.

Just don’t call it a crisis.

“I don’t accept the word crisis,” she says. “I am pleased companies are coming forward and are willing to rectify this issue.”

Crisis or not – and unions definitely think it is – the Woolworths case highlights a culture in Australian corporate management of failing to pay workers what they’re due.

At the top end of town, companies that have confessed to tens of millions in underpayments include Wesfarmers, Qantas, Commonwealth Bank, Super Retail Group and Michael Hill Jewellers.

And then there are the likes of franchisees at convenience store chain 7-Eleven, who underpaid workers $160m as part of what was allegedly an entrenched system of deliberate rorting; the Made Establishment empire fronted by celebrity chef George Calombaris, which underpaid restaurant workers $7.8m; and a string of employers across the economy who have underpaid vulnerable migrant workers.

Even the ABC, which has broken news about wage theft, and labour law firm Maurice Blackburn, which campaigns against it, have confessed to underpayments.

Whether it’s through apparent negligence, as in the case of Woolworths, or through deliberate wage theft, as at 7-Eleven, it has become obvious that underpayment is endemic across the economy.

Corporations are on notice

The Woolworths debacle has also shone a harsh light on an excuse beloved of corporate Australia: that the country’s industrial relations system is just too complicated for hapless executives to comply with.

If Woolies is able to track thousands of products from warehouses to stores scattered across the nation in near real time, how can complexity be to blame?

Just as a multi-billion-dollar compensation bill has shocked bankers into taking seriously the risk posed by ripping off their customers, the rest of corporate Australia is now on notice that they need to tackle their underpayment problem.

If they don’t, they will face a wave of emboldened activist investors and a fed-up regulator that is grappling with its own credibility problem, as well as running foul of new laws proposed by the Morrison government.

“They should know better and they should do better,” Parker says of Woolworths.

“When I say disappointing, it’s because I’m pretty confident that they did all the other stuff right – the ordering of their products, knowing what’s going on in their network, keeping tabs on their widgets.

“It’s almost cavalier in the sense that you don’t put the effort in to make sure your greatest asset is getting paid properly.”

She has had 22 self-disclosures since the start of the year.

“It’s suddenly become a large number,” she says. “It feels like it’s weekly. I think the corporate sector has woken up and they’re madly checking their payrolls.”

She accepts corporate contentions that Australia’s award system, which sets 122 minimum pay rates for various occupations and has been in place since 1904, can be complicated – something unions dismiss.

“What I find pretty hard to cope with is these are often their own enterprise agreements that they’re getting wrong, which are carefully negotiated line by line.

“They have been lax and lazy and just let somebody else do it.”

She says the corporate influx is pushing her office towards becoming a corporate regulator, a “big change” that requires a new set of skills.

Does this mean she’ll be asking for more money?

“We’ve had good support from the minister but I think it’s fair to say the extent and complexity of these sort of disclosures is greater than we could ever have envisaged, our workload has significantly increased and we’ll be looking at that,” she says.

In the meantime, she dismisses the persistent criticism from the union movement that her office has been unwilling to prosecute – criticism that sounds very familiar to anyone who’s followed the troubles experienced by the corporate regulator, the Australian Securities and Investments Commission.

Parker isn’t ready to follow Asic’s lead and move to a “why not litigate” approach to demonstrate some steel.

“I think we’re doing a really good job, we’ve got $40m recovered for workers last financial year,” she says.

‘We need to change the system’

The secretary of the Australian Council of Trade Unions, Sally McManus, wants penalties for underpayment beefed up and unions given back the right to check pay records, which they lost under the Howard government.

She scoffs at the line that industrial law is too hard.

“Some of the companies in the hospitality sector, for example, which have been involved in the massive instances of wage theft in recent months, have multiple locations in different states, manage the complex logistics involved in supplying fresh food to those businesses, manage rental arrangements, marketing promotions … we simply don’t believe that it’s beyond the capability of these businesses to pay their workers correctly,” she says.

“It’s not a question of what businesses can do, but what they think they need to do, and what they think they can get away with.

“Unfortunately under the current system many businesses make the calculation that ripping off workers and getting caught will still be cheaper than paying them correctly in the first place. We need to change the system to shift that balance.”

The Woolworths debacle couldn’t come at a worse time for corporate Australia, which has been lobbying against legislation proposed by the attorney general, Christian Porter, to make wage theft a crime – something the Morrison government has been dragged towards by the existing wave of public revulsion towards underpayment scandals.

In an inadvertent demonstration of how much attitudes in corporate Australia need to change, industry body AI Group used a recent submission to a Western Australian inquiry into wage theft to complain that companies already “divert” substantial resources into paying staff properly.

“We could have worded that differently,” Steve Smith, AI Group’s head of industrial relations, says.

“But the point we were making is that most businesses put a lot of resources into compliance.”

He is sticking to the line that it’s all too complicated, even though his own body offers an advice service to help businesses figure out which of the 122 awards they are covered by.

“There are hundreds if not thousands of issues that come up about how one award relates to another, how various penalties apply,” he says.

Calling in the auditors

Former Australian Competition and Consumer Commission chairman Allan Fels, who headed an inquiry into the exploitation of migrant labour and ran a compensation scheme for ripped-off 7-Eleven workers until he was sacked by the company, isn’t buying the complexity excuse.

“There is this view that the award system is too complicated, but while that’s true the cases I’ve seen involved people deliberately underpaying people,” he says.

“There is a widespread culture of substantial underpayment of temporary migrant workers – that is, students and backpackers – and that culture has nothing to do with awards being complex. They’re a simple decision by business to underpay.”

He doesn’t think Woolworths is in this category, but says it was “a mistake and at worst a failure to give enough priority to making sure workers get paid”.

“I do think nonetheless the Fair Work Ombudsman should probe deeply enough to determine what went wrong, having regard to the large amount involved,” he says.

He thinks the issue needs to be taken more seriously at the boardroom level – and beyond.

“Compliance programs may need to be wider in scope than just identifying egregious forms of wrongdoing,” he says. “I am also a little surprised the auditors didn’t pick up this problem.”

Activist investor group the Australasian Centre for Corporate Responsibility (ACCR) also wants to know where the auditors have been.

“We would raise questions about what the auditors are actually looking for and whether they are actually properly investigating the company,” the ACCR’s head of workers’ rights, Katie Hepworth, says.

The ACCR intends to expand its existing program of activism over exploitation in supply chains – such as fresh food, in the case of supermarkets – to cover directly employed staff.

It has already asked to meet Woolworths over the underpayment debacle.

And for the year ahead, she makes it clear that there is a spectre haunting corporate Australia – the spectre of wage underpayment.

“There are significant gaps in corporate governance and it shows they haven’t been looking at employee issues,” she says.

“Suddenly it’s an area of massive corporate risk both in terms of reputation and the underpayments themselves.”