Wage Inspectorate Victoria said on Wednesday it had filed more than 1000 charges against Woolworths Group and its subsidiary Woolstar in the Magistrates' Court of Victoria.
The alleged underpayments ranged from $250 to more than $12,000 and are said to have occurred between 2018 and 2021.
Under Victorian law, employees who have worked at least seven continuous years with one employer are entitled to have their unused long service leave paid out when their employment ends.
A Woolworths spokesman said the company self-reported the issue to Wage Inspectorate Victoria in February 2022 after an extensive review of its payroll systems that began in 2019.
"We have since made back payments or corrected leave balances to affected team members, including interest and superannuation," the spokesman said.
"We have apologised to affected team members and strengthened our payroll systems to address the long service leave issues we identified."
The Wage Inspectorate also has cases against Optus, CommSec and BankWest alleging breaches of Victoria's long service leave laws.
"Long service leave is a long standing, valued workplace entitlement in Victoria and the Wage Inspectorate is here to ensure it is paid when it is owed," said commissioner Robert Hortle.
Woolworths has admitted underpaying thousands of staff more than $390m since 2010, mostly salaried managers.
Charges brought by the Fair Work Ombudsman in Federal Court began in Federal Court in June.
In 2020, then-Woolworths chairman Gordon Cairns apologised but said Australia's "out of control" industrial award system was partly to blame.
In recent years Coles, Qantas, BHP, the ABC, Super Retail Group, Michael Hill Jewellers, Rockpool Dining Group, Domino's Pizza and Sunglass Hut have all admitted paying staff in violation of Australia's complicated system of wage system.
