We use consultants who bill by the hour. They don't charge us for lunch, but other than that, they are considered on the clock. We don't micromanage, so we are charged for any screwing around. . .unless we micromanage and they really overdo the screwing around and as long as they are meeting their milestones, we rarely - if ever - know if/when they are screwing around. It's not worth it to us - financially or mentally - you to micromanage to that level. Ditto for bathroom breaks.
I think that indeed is the case if you use them for an hour or two. If you have them hanging around full time at the office, I doubt they would pause it for a 5-10 min bathroom break.