All staff were notified of the review on Thursday, which is being conducted by external firms.

The letter included a formal apology and a commitment to fully repay all past and present staff, plus interest.

At the early stages of the investigation, issues have been identified around the incorrect application of penalty rates including weekends, public holidays and shift allowances.

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Another potential issue involved minimum-length shift pay not being applied, for when shorter shifts than the minimum are worked.

The Fair Work Ombudsman had written to UTAS in 2020 requesting it audit its payroll practices.

UTAS chief people officer Jill Bye said the university wanted to "say sorry" to affected staff, and promised to rectify the situation.

She said there had been "varying interpretations" of "complex" staff agreements, and inconsistent practices.

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"Once the review is finalised, we will communicate with any current and former staff who may be impacted," she said.

"We will use this review to strengthen our processes, to ensure that issues are addressed and are not repeated in the future."

UTAS believed it was "one of several" in Australia's universities sector responding to underpayment issues.

The National Tertiary Education Union was concerned the types of underpayment at UTAS could go beyond penalty rates and minimum shift pay, given about half of its workforce is casually employed. The union claimed the issue could stretch back to 2013-14.

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NTEU Tasmanian secretary Pat McConville said it was likely to have affected many staff.

"These underpayments potentially affect hundreds of UTAS staff, over a number of years," he said.

"These underpayments may be just the tip of the iceberg."

UTAS and the NTEU are currently engaged in bargaining agreements.

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