My thinking would be that if you have some formal, evaluative procedure you could "write up" the employee for exceeding his authorized hours, and use this to cause his/her next review to be less than stellar. With sufficient occurrences, you could make it grounds for dismissal, or even require that the employee not work for a certain number of days/weeks as a consequence (unpaid suspension). But I really think that if they work the hours, you have to pay them whether or not you meant for them to work the hours.
You might suggest that someone check the time cards every day, and if someone is getting too close to overtime, you send them home early on a day that is less hectic so you can keep them on the days you really need them.
I don't have any legal experience to base this on, just my opinion shooting from the hip.