You can tell hourly employees that they may not work overtime. You can also discipline them if they do work overtime in spite of your direction. But this discipline may not take the form of not paying them. You must pay them for overtime worked, even if they have gone against your orders or you will violate the FLSA.
RuthG hit the nail on the head. If the employee worked the time, even when you have told them they are not allowed to work overtime, you must pay them. If you are an HR professional I would do some training on this to make sure that all your managers are aware this is what must happen. Most managers have a tendency to say, I told them they were not allowed to work and so I am not going to pay them since they didn't listen. This can get you into major hot water. If you are a manager then you need to monitor all of your employees time and make sure that they leave when they have hit 40 hours (or 8 hours a day, if you are in CA). I would also do some training with your employees. If they feel they can't get the job done in 40 hours then you both need to sit down and re-evaluate the job. Do you need to take some responsibilities away from this person, is there a better way to do the job in less time, do you need to add another employee?