A Northern Ireland employment agency has been banned from trading and another is being investigated by the Department of Education and Learning (DEL).
The second Employment Agency Inspector's Annual Report also revealed that DEL is now in the process of bringing forward its first prosecution case against the second agency. Neither of the agencies have been named.
New powers which come into force this week enable the Department to try cases in the Crown Court, which has the power to issue unlimited fines, to request financial information from agencies or from third parties such as banks, and to share information on agencies suspected of non-compliance with national minimum wage compliance officers.
Meanwhile research carried out by the Department showed there were around 270 employment agencies and businesses operating in Northern Ireland in September 2009, 58% of which had fewer than five employees and 92% of which were independently owned.
At the time of the survey, more than 84,000 individuals were registered with an employment agency or business in Northern Ireland and more than 22,000 individuals were employed on a temporary basis through an employment agency.
From April 2009 to March 2010, employment agency inspectors carried out a total of 44 inspections.
The Minister for Employment and Learning, Sir Reg Empey has welcomed the publication of the report.
"My department is fully aware of its duty to ensure that the sector is properly regulated and that those few rogue employment agencies who would attempt to abuse vulnerable workers, or break the law and gain unfair competitive advantage, will be dealt with severely," he said.
Research carried out by the Department found that disproportionate numbers of males, non-nationals and those from lower socio-economic backgrounds were employed through recruitment agencies.
The Department added that more needs to be done to increase protection of migrant workers, who are often amongst the most vulnerable, and aims to address this in the coming year.