The Fair Work Ombudsman has started legal proceedings against Sydney man Chang Yen Chang and his private company Yenida.

Mr Chang owned and operated the Scamander Beach Resort Hotel until late last year. Mr Chang and Yenida sponsored a Malaysian national on a 457 skilled worker visa after advertising in a Malaysian newspaper for a chef to work at the hotel's restaurant.

The man's wife was also brought over from Malaysia on a spousal visa and employed as a kitchen hand at the restaurant.

Ombudsman Natalie James said the chef was short-changed $52,928 between 2010 and 2014, and his wife more than $10,000 between September 2009 and January 2010.

"Mr Chang and his company knew the staff were lawfully entitled to minimum award pay rates but chose to pay the Malaysian couple significantly less than Australian staff because of their race," Ms James said.

It is alleged that the chef was not covered for applicable penalty rates for night, weekend and overtime shifts.

"Overseas workers in Australia have the same rights and entitlements as Australian workers and must be paid according to Australian workplace laws," she said.

"We treat underpayment of overseas workers and contraventions of their workplace rights very seriously because we know they can be vulnerable if they are reluctant to complain or are not fully aware of their rights."

Mr Chang and Yenida paid their Australian employees mostly in accordance with hospitality industry standards.

However, due to some provisions being incorrectly applied, Fair Work inspectors believe 15 Australian employees at the Scamander resort were also underpaid a total of $26,566.

The Fair Work Ombudsman is seeking a court order for Mr Chang's company to back-pay the former employees in full.