Can be a delicate situation. It's easier if they are members of a flying club at which you work, as you'll have a direct say in whether or not they are competent to subsequently hire the company's aircraft.
I've been in the situation of having PPLs who own their own aircraft come to flying schools at which I have been an instructor to do revalidation trips with me in school aircraft. The standard can vary wildly, as some owner/PPLs don't do any standards or refresher flying with instructors at all until they are forced to.
One borderline case I had was with a tug pilot at a local gliding school. He didn't do any flying other than tugging at the same airfield. When I flew with him he couldn't really navigate or operate the radio to speak to a radar unit, but his aircraft handling was safe enough so I reluctantly signed him off on the basis that his ability was adequate to perform his usual glider tug task.
On the other hand, I have refused to sign the logbook of several pilots that I considered to be unsafe. Each time I've debriefed them on the dodgy points and offered some refresher training. Almost all have been receptive to this, and usually another sortie tailored to their requirements has brought them up to speed. One horror story involved a PPL who operated her own aircraft; on our one hour sortie she got lost in the circuit, then climbed into solid IMC, gave me control and announced that she didn't have an IMC rating and that I would have to sort it out! She got a bit upset when I told her that she'd be stuffed if I'd been her 10 year-old daughter in the other seat...
The bottom line is that I still use the maxim that my first CFI gave me: When checking out another pilot, if you wouldn't be happy having them take your wife/girlfriend flying then they need more training.