Papua New Guinea's Teaching Services Commission says teachers choosing to support the nationwide strike will be penalised.
The teachers union, the PNG Teachers Association, says the strike is due to what it describes as full non-compliance with a May agreement between the union and government.
The acting commissioner for Operations, Michael Pearson, says July the 5th was given as the date given to commence payments.
He says about a third of teachers have been paid and the remainder should be paid by September.
Mr Pearson says teacher salaries are being adjusted, but they have to work out exactly what is owed to about 37,000 teachers on a case by case basis.
"The government has not reneged in any way. Our greatest concern is that the union has not provided to us the names of the people it claims are underpaid. It seems like a case of we've dealt with the issues and we will now be dealing with the teachers concerned and penalising those teachers who are involved in the strike."
Michael Pearson says the teachers indefinite strike is costing the government 350,000 US dollars a day.
He says only primary schools have been affected this week, as secondary schools are still on school holidays.