Legality v Insurance
To expand on bose-x's statement, you could effectively be employed by a corporate body as a salaried Ablutions Hygiene Technician and as an aside to your main duties operate the company Learjet on your PPL / ME IR with appropriate TR, etc. to run the boss here, there and everywhere.
Similarly, you could be employed as an aircraft cleaner at the local Flying School and undertake some instruction 'on the side' when you haven't got any aircraft to clean. You're being paid as a cleaner not as a FI but you are undertaking the role of a FI.
Provided your salary is related only to your contracted duties and not to your flying, I do not believe there would be anything illegal in this.
This may all be legal as far as the word of law goes but you may be giving your insurers a massive cop out when it comes to submitting a claim for the C-152 broken by the student pilot on solo circuits under the supervision of a PPL FI when their policy clearly states that the FI must hold a CPL.
I wonder how many insurers would insure a FTO or RTF to 'employ' PPL FI's without loading the policy. For that matter, I wonder whether any training organisations are using uninsured PPL FI's on the weekend.
When someone is injured or worse as a result of an accident when training and the insurer has the cop out to avoid paying the six + figure claim, you can rest assured they will use it.............bye, bye school........as well as the personal claim against the FI who was operating uninsured (possibly unknowingly but that would not be a defence)....bye, bye house, car and everything else (s)he's worked hard for, for years.
There is no way I would work as a PPL FI without having personally seen the insurance policy with my own two eyes and I think I would even go so far as to write to the insurance company for written confirmation that I was personally covered.