A NSW healthcare watchdog has been slammed for hiring a convicted sex offender to investigate misconduct.

Media investigations suggest the Health Care Complaints Commission (HCCC) hired the convicted sex offender in December 2017, but a background check was not done until May 2018.

By this time he was already in his job, investigating patient complaints, potentially including sexual misconduct by doctors.

The man’s offence happened at a beach carpark near Cronulla in August 2000, while he worked in an investigatory role with a government agency.

The NSW Local Court heard the offender parked alongside a young woman’s vehicle and made “uncomfortable” eye contact before exposing himself.

He was found guilty of wilful and obscene exposure in a public place and fined $500.

Sex offenders cannot work as police officers, lawyers or in roles involving children, but there is no specific law preventing the HCCC from employing a person who has committed a sex offence.

Some HCCC staff who handle medical complaints say it is still inappropriate.

“I personally feel it is not an appropriate workplace for a sex offender,” one insider has told the ABC.

“I think victims would be reluctant to share their story with the Commission if they were aware of the offender's background.”

“Would you send your child to a school if you knew the cleaner was a convicted sex pest?” another asked.

"How can a sexual offender be trusted to manage a complaint about a predatory doctor, nurse or psychologist?”

The HCCC has confirmed that the required background check was delayed, but says a “risk assessment” found “no concerns which would raise questions” about the hiring decision.

The man’s sex offender status became a “badly kept secret” at the HCCC, insiders allege.

Two employees who uncovered a file revealing his delayed background check were accused of wrongfully accessing private records and sacked, reports say.

NSW Health Minister Brad Hazzard says he has demanded the HCCC provide “a full report of the circumstances” surrounding the man's employment.

Shadow Health Minister Ryan Park has backed the “brave whistleblowers”, calling for bi-partisan support for exposing “troubling issues that shouldn't be occurring”.