The operation followed similar ones in recent years that also found serious employment breaches.
In 2014, the ministry took enforcement action against about 18 Bay kiwifruit contractors after auditing 35 companies.
This time around inspectors audited 62 companies over three months from April last year.
They uncovered 94 breaches, among them failing to provide employment agreements and paying workers less than minimum wage.
One contractor owed its workers more than $26,000 - money that was paid out only after the inspectorate got involved.
Inspectorate regional manager Kevin Finnegan said it was likely more contractors had been paying workers less than the minimum wage but disguised it through bad record-keeping.
"This is why the Labour Inspectorate takes employers' obligations to keep records so seriously."
He said the breaches were disappointing but not surprising.
"It's an issue we've raised with the industry for a number of years.
"There are no acceptable excuses for employers failing to meet all minimum standards or provide people with all their minimum entitlements.
"Almost all of the employers found in breach were using migrant labour, which is concerning because these are vulnerable people who may not fully know their rights and entitlements."
Also not surprised was Dennis Maga, First Union's national organiser and migrant workers co-ordinator.
"We've been expecting this report for a while," he said.
"Earlier this year we reported to the ministry and the Labour Inspectorate our concerns regarding the operations of some contractors and owners of kiwifruit-picking companies in the Hawke's Bay and the Bay of Plenty."
He had little faith the operation would deter bad behaviour from directors that benefited from "cheap and docile" migrant labour.
Directors needed to be made personally liable to stop them simply closing down exploitative companies and reforming under another name, he said.
Mr Muller did not think more regulation was needed.
He said the operation and subsequent enforcement action taken by the ministry showed the Government was watching the important industry and holding companies to account.
"Kiwifruit is a hugely important part of this region and it needs lots more people to meet its growth expectations.
"What this shows is that too many contractors are still not where we need them to be and that's unacceptable."
He said the many good kiwifruit labour hire contractors in the Bay would not be happy that a few bad apples were damaging the reputations of all.
New Zealand Kiwifruit Growers chief executive Nikki Johnson said the results were disappointing and unacceptable.
She said new measures to monitor compliance with employment law and worker welfare had been introduced, as well as education programmes to teach growers and contractors about their legal responsibilities to their workers.
"While significant improvements have been made, there is still work to be done," she said.
Operation targets Bay kiwifruit contractors
- 62 labour contracting companies audited
- 687 employees interviewed
- 94 breaches of minimum employment standards found
- 53 per cent of employers did not meet all minimum employment standards
- 26 companies had enforcement action taken against them
- 2 employers issued with infringement notices and $1000 fines
