The minister announced that leniency could be granted on a case-by-case basis.
This move effectively lets 7-Eleven profit from the abuse as victims of the abuse are unlikely to come forward to claim full payment.
The government's partial reprieve comes after law firm Maurice Blackburn and Labor leader Bill Shorten wrote to Malcolm Turnbull urging him to grant a widespread amnesty to workers exploited by 7-Eleven franchisees, as one of his first acts as Prime Minister, according to report in the Sydney Morning Herald.
Josh Bornstein from law firm Maurice Blackburn told the SMH that the government's response was appalling.
"Minister Dutton is saying to these vulnerable students: 'Trust the Immigration Department to do the right thing.' Such a statement from government merely serves to create further uncertainty and will in fact deter people from coming forward," he said.
"The minister's statement guarantees that many 7-Eleven employees will not come forward to seek the substantial sums of back pay owed to them. Many employees are owed over $20,000," said Josh Bornstein from law firm Maurice Blackburn.
Professor Fels has called the government to go further and has asked it grant a reprieve to any employees who bring forward wage abuse claims. It is estimated that there may be some 4000 employees with back-pay claims.
"Many current and past 7-Eleven employees have been reluctant to report wage abuse because of the fear, whether real or imagined, that they will not be permitted to continue to stay in Australia because of non-compliance with visa restrictions," said Professor Fels.