They would prefer casual business attire - shirts, ties and nice pants for the men; blouses and dress pants or skirts for the women (and they'd love suits or dresses), but will take jeans so long as they're not worn with a ratty t-shirt or a camisole or such. My employers themselves always dress better than these requirements.
This is a business and it's not unreasonable to expect people to dress in a businesslike manner, imho, as opposed to being dressed for the beach.
But then again, I was hired, in some small part, because, as they said, "You're not going to wear a halter and shorts." BTW, be grateful for that. :) So, I'm already surpassing code.
We are all, however, amused at the clause that requires bathing, largely because no one currently here seems to be remiss in that.