The New Zealand Prostitutes' Collective is helping gather information on migrant sex workers, but argues decriminalising the industry would be a better option.
Immigration New Zealand (INZ) is working with the collective to get more information about migrant workers, in an effort to combat exploitation.
Legally, only New Zealand citizens and residents can work in the sex industry.
New Zealand Prostitutes' Collective founder Dame Catherine Healy said migrants risked exploitation and abuse, but making sex work legal for migrants would help stop this.
"We're not talking about significant numbers of people in this situation," she said.
"There have been concerns expressed by sex workers in this country that there's not enough work to go around, but at the same time a lot of other occupational groups would say that too - just end the discrimination it's not appropriate."
Immigration New Zealand Compliance assistant general manager Peter Devoy said the research was in its early stages, but the department was being pro-active in its engagement with the community.
He said legalising sex work for migrants could be an option.
"That argument goes beyond INZ but there very well may be room to have a discussion around that."
The immediate focus for Immigration NZ was addressing migrant worker exploitation, but information was hard to get.
"They are going to be unlikely to come forward because they aren't working lawfully, there are also issues of mistrust around any law enforcement type agencies and certainly immigration... they don't want to be identified as working in the industry and then sometimes there is a language barrier as well."
Dame Catherine said the prostitutes collective was helping Immigration NZ so they too could learn more about the illegal workers.
"We've been helping the researchers get in touch with migrant sex-workers as well as operators of brothels and people who have knowledge about the situation.
"We're keen to find out as much as we can about the circumstances they're working in and their experiences."
She said Section 19 of the Prostitution Reform Act, which bans migrants from working as prostitutes, was well-meaning but had a negative effect.
"Section 19 was introduced as an anti-trafficking initiative, and of course all it has done is feed a kind of tier of vulnerabilities.
"Definitely it was well-intentioned, but it has had a predictable effect of creating an underground population of sex-workers who would then become vulnerable."
In July, the United Nations Committee on the Elimination of Discrimination against Women released its observations on New Zealand and said Section 19 of the Act may have a negative impact of migrants. It recommended amending Section 19.