The Fair Work Ombudsman has commenced legal action against Arthur Antonopoulos, who formerly owned and ran the Wild Sage Café at Cammeray in the inner north.
Also facing Court is Antonopoulos' company Blu Hornsby Pty Ltd.
They allegedly breached workplace laws by failing to comply with a demand to back-pay a pastry chef at the café $22,329 in outstanding wages and entitlements.
The chef, an Indian national in her early 20s, was allegedly underpaid her normal hourly rates and penalty rates for weekend, public holiday and overtime work between November, 2012 and May, 2014.
Initially in Australia as an international student, the employee was later sponsored by Blu Hornsby on a 457 skilled worker visa.
She was reluctant to raise concerns about her wages because she was reliant on Antonopoulos' support for her visa to remain in Australia.
However, after her employment ended, the employee lodged a request for assistance with the Fair Work Ombudsman, which commenced an investigation.
Antonopoulos allegedly told Fair Work inspectors that if the Agency took legal action against him, he would place his company into liquidation.
In March, the Fair Work Ombudsman issued a Compliance Notice requiring Mr Antonopoulos and Blu Hornsby to rectify the underpayment within 29 days, but they allegedly did not comply.
Under the Fair Work Act, business operators must adhere to Compliance Notices or make a Court application for a review if they are seeking to challenge a Notice.
Fair Work Ombudsman Natalie James says inspectors made extensive efforts to resolve the matter by agreement, but had not received sufficient co-operation.
"We prefer to assist employers to rectify inadvertent non-compliance issues, but we are prepared to take legal action against employers who refuse to co-operate," she said.
Antonopoulos faces a maximum penalty of $5,100 and his company faces a maximum penalty of $25,500.
The Fair Work Ombudsman is also seeking a Court Order for the company to back-pay the employee in full.