I have a client in his early 70's who is brand new to pilates. He has one leg over a half inch shorter then the other and wears a lift all the time since he experiences hip pain when he does not. Do I have him do all his foot/standing reformer work with his sneakers on?

I would be more inclined to ask if you and his doctor or other health practitioner could work together. Only because if he already has pain and whilst we know what we can do you do not want to risk a law suit if something happens.
However I would also look at experimenting with 2x4,Yoga blocks or steps to even him out.