I might give notice at this point. I would draw up a letter advising them that biting is not tolerated in your daycare. You have to consider the safety of all children. If the child bites again the parents will need to pick up immediately. And if it continues to be an issue then the child will be terminated from care.
what they do at home and how they discipline is beyond your control. So, control what you can. If he bites, he goes home. If the parents refuse to come get him, term immediately.
At 3.5 he knows he shouldn't be biting and he has other ways of expressing himself other then physical.