No, they do not need to pay you simply because their rules may "intrude" on your life in some way. Employers may set rules about behavior that limit what employees may do in some way: for example, grooming or appearance codes prohibiting visible tatoos or piercings or requiring that hair be kept a certain way. Or, for another example, rules that you cannot be impaired at work, which limits your ability to drink in the hours before work. These rules clearly impact the employee much more than the rule you describe (no smoking on company policy) but do not require payment because these limitations do not mean that you are working on when you are not: it is not the fact that employment may limit your freedom to some degree that constitutes work, since any job limits your freedom in some ways; rather, it is only actually doing work for the employer that constitutes working and requires payment.