Opposition Leader Kevin Rudd has said his wife's company had made an honest mistake, which she had sought to rectify.
Mr Rudd admitted the company had indeed underpaid some workers, but it had taken remedial action when this was discovered.
The company itself has issued a statement denying allegations that it had acted unfairly to its workers.
WorkDirections Australia Pty Ltd, a subsidiary of Therese Rein's company, Ingeus, denied it had stripped workers of significant award conditions.
It took over the Frankston-based company Your Employment Solutions (YES) last year and took over its workers.
WorkDirections today issued a written statement saying its pay arrangements with employees were "certainly not unlawful", and had not been designed to remove penalty rates, overtime or allowances.
"The common law agreements offered to YES employees when WorkDirections acquired the business 10 months ago, were for employment on no less favourable terms than they were previously on," the statement read.
"The arrangement offered to transferring employees involved the payment of an aggregated wage rate with an above award component calculated to fairly compensate employees for their full award entitlements.
"Such an arrangement is not uncommon in private sector
employment and certainly not unlawful."
The statement said the company also took steps to comply with a pay increase in line with the award in 2006, and that it was during this process that it was discovered that some staff had been underpaid because "their duties had not previously been classified correctly in accordance with the award".
The statement said WorkDirections Australia immediately ordered an external independent review to determine which staff members had been affected.
"All those employees still working for the company were recompensed in full for under-payments by 20 April 2007," the statement read.
"The company had already taken steps to locate those who had left the company's employ and will recompense them in full shortly."
WorkDirections Australia said it would review its common law agreements with employees to ensure they comply with relevant industrial laws.