Do you salute someone who is wearing civilian clothes?

Used to be (Yes) if you knew they were an officer. Now according to AR 600-25 Salutes and Honors, Para 1-5 it's not required. You may want to politely share this with the SSG.

i. Salutes are not required to be rendered or returned when the senior or subordinate, or both are—
(1) In civilian attire.
(2) Engaged in routine work if the salute would interfere.
(3) Carrying articles with both hands so occupied as to make saluting impracticable.
(4) Working as a member of a detail, or engaged in sports or social functions where saluting would present a safety
hazard.
(5) In public places such as theaters, churches, and in public conveyances.
(6) In the ranks of a formation.

Personally if I ran into someone from the unit, who I knew was an officer I would render the salute and greeting of the day, just as a courtesy. Also depending on the rank and time in service of the individual they may not be familiar with the change in wording and whipping a high ball is easier than explaining to some old fart that the reg has changed.

If you recognize the officer out of uniform and CHOOSE to salute, you may. It is a matter of chosen respect, not requirement and anyone that says that it is required is either an idiot or is hazing you. The next time said SSG retells that, hand him or her a copy of AR 600-25 C 1 (1-5) and roll on. Then aSk for a box of ground guides when he finds the AR wording that states what he claims.

Service dependent.
Excerpt from the Bluejackets Manual:
In Civilian Clothes
If you are in uniform and recognize an officer in
civilian clothes, you should initiate the proper greeting
and salute. In time of war, however, an officer not in
uniform may be deliberately avoiding disclosure of
his/her identity, so you should be cautious in following
the normal peacetime rule.