Just as an aside, I would actually be more willing to undertake this type of interview if you weren't paying me. I don't have any ethical qualms about interviewing while working a full-time engineering job, but I'm not entirely comfortable taking a contracting job under the table. It may be something of a symbolic gesture given that it's such a small time investment and small amount of money, but it feels fundamentally dishonest, especially if you're a current or plausible future competitor to the company I currently work at.
The official policy where I currently work is that moonlighting is allowed but must be approved by our legal team, and while I could probably get away with not asking for permission, I'd be pretty uncomfortable in both cases (asking, or not asking).