There's no doubt that when you literally or figurative blow a whistle, you are going to awaken sleeping dogs. Sometimes that's not the worst thing in the world to do.
The first step is to take a careful look at the way your associates' behavior is impacting you. If it is basically background noise, then you should focus on your assignments and the positive aspects of your work, and figure that your marginal co-workers will cause their own demise sooner rather than later. However, if their actions are creating work-related problems or are a major assault on your sense of what is right and fair, then you and your associates should speak up. To mix a couple of metaphors, if you are going to awaken sleeping dogs, there is safety in numbers.
When all of you discuss the problem with the owner, the best way is to focus on business issues and not personalities. For example, you can indicate that flextime is causing some productivity problems, and then provide specific examples. It should not be difficult for him to realize that it is time to check up on flextime.
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