An audit has revealed Charles Sturt University (CSU) owes almost $4.7 million in back payments to thousands of current and former casual staff.
A statement from vice-chancellor Renee Leon said CSU commissioned the external review in response to widespread wage compliance issues in the higher education industry.
More than 2,500 employees have been identified as missing out on pay and superannuation since July 2015.
CSU said 75 per cent of the back payments owed were for $1,000 or less.
The National Tertiary Education Union's Bathurst branch secretary Greg Auhl said it was pleasing that the "enormous" problem had been acknowledged.
"We're very happy that our members will get what they have actually earned and what they should have been paid for in the first place," Mr Auhl said.
It comes after the university cut hundreds of jobs and subjects in response to a $50 million deficit in 2020.
Universities reliant on 'good graces'
CSU's statement said the underpayments were the result of unintentional errors, due to "mistakes" in interpreting the Enterprise Agreements.
But Mr Auhl argued that explanation was not good enough.
"As academic and professional staff we understand what our work entails, so why can't our management understand that?"
He said there was an industry-wide over reliance on casuals.
"For far too long, the higher education sector has relied on the good graces of casual and contract staff to work above and beyond what they're actually paid for," Mr Auhl said.
"What we're starting to see here now is that being exposed."
CSU said the review had also identified instances of overpayments, but would not seek that money back.
It said it had identified "procedural enhancements which are being implemented to ensure ongoing wage compliance".
