If they are only reporting actual worked hours then 4 per day makes them as productive as an office bound drone. MSFT has a concept they push called "Core Hours" or did some time back. The core hours that can be scheduled in normal expectation is 20 per week. The rest is taken up by the social miscellany of office life.
Personally I work almost all my contracts from home, lately doing either software forensics or Apple iOS development, and I work a pretty solid 8-10 hours each day, sometimes more. Sometimes a lot more for the lawyers who schedule at the last minute. Sometimes less if demand is low. And occasionally I am forced by a job to fly all over the country and my actual work hours plummet. So for me at least, I am much more productive at my home office, though my social life suffers greatly. Well, more than greatly.
The metric the employers should be using is "Are they getting the job done as expected?" and if not change the situation, either pull them into the office a few days a week, or fire them. Do let them know they are below expectations and allow them to fix the behavior! Also I find a daily scheduled audio chat helps keep expectations aligned. My company has not had an office downtown for several years now and we are pretty much pure cottage industry with an on demand office for clients visiting us. And I dress for work, same as I would for an office, I am pretty casual though, jeans, tee shirts and slip on shoes.
YOU LAZY A$$ BUMS LOAFING OUT THERE, GET TO WORK, YOU'RE SPOILING IT FOR THE OTHERS