Its inspectors randomly audited 18 businesses known to employ international students, including restaurants, cafes, takeaway food outlets and car wash sites.
The results of the crackdown were released yesterday.
The Ombudsman's Office found 11 out of the 18 businesses investigated contravened workplace regulations and eight out of 18 had been underpaying their staff.
The crackdown followed concerns from Newcastle Trades Hall that many students were being underpaid.
The Herald reported in July that Asian students studying at the University of Newcastle had been targets of underpayment and unpaid work trial scams.
It comes after The Herald revealed yesterday that students face hostility in Newcastle including harassment on public transport and struggle to get housing because of discrimination.
Fair Work Ombudsman executive director Michael Campbell said inspectors recovered $65,000 for 80 employees, an average of $812 each.
However, Mr Campbell said only a small number of foreign students were among those employees underpaid.
"Our findings suggest that more work is required in the Hunter Valley to educate and assist employers to understand their legal obligations to their workforce," he said.
"While we found that most employers want to do the right thing, there is still a lack of understanding by many of their responsibilities."
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