If you're only developing a small app that will not change in the foreseeable, then just do whatever is quickest now. If you want a long-term maintainable app, then let me put forth the following.
The problem with this vertical layer approach is that whenever you need something in the view, you will have to add it to both the Business Layer (even if the business layer doesn't care about it), and the Data Layer. This requires your business layer to look like 1) UI views of the data 2) business views of the data and 3) the database representation of the data. That and/or you need a lot of mapping in-between layers. All of which dilutes business layer's actual purpose of representing business logic. What tends to happen then is that all the business logic gets migrated into transaction methods (that could just as well be static methods) to just change states on data objects. There's nothing at all wrong with that if your problem domain is nothing but CRUD with no complex logic. With complex logic, such business methods can get pretty tricky or even have undefined outcomes (because complex interdependencies on "fields" can be contradictory and hard to resolve).
Assuming you have complex logic, user views of data and business representations of data are often very different, and so UI views end up with specialized models of the data. If I were you, I just embrace this and use a simple version of the CQRS principle. That is, have the data for your UI views come from a different place than where your business operations are executed. In your case, I might have an EF Model in your DAL that only services your UI views, and gives them exactly what they need (whether by database views, stored procedures, or pre-compiled report tables). Then create a separate EF model that services only the needs for your Business entities. Then when you are ready to perform an actual business action, the UI's viewmodel action method can load the business object from the business EF model (or better yet, call an object factory from the business layer which does this) and run an appropriate action on the business object. Note that I'm also making the assumption here that your database is highly relational (mostly 2nd and 3rd normal form) and you are set on using EF.
I would not try to make your View Models into business logic. This makes your business logic not easily reusable on other platforms or applications (like web). MVVM should only service the UI. In my mind, the V (view) represents what the user sees and operates. The M (model) represents what the user chose on that view. And the VM (view model) translates between the two. Your program should then take the user's validated choices (UI model) and extract the needed data out of it to perform an appropriate business operation.