Agreed. Assuming he's salaried and not hourly there's no argument in my mind that he should feel required to tell them. If he's hourly I'd say it might be a gray area.
That really depends. I've seen a lot of contract engagements where part of "the work" is just being there (or available) during standard business hours (e.g., 40h) regardless of whether you're doing anything. So depending on the situation, it is a "gray area".
