If you get this error message when trying to add a new member, this means that they already have a My Hours account registered under this email address. There are two possibilities:
This user was a part of your account before and you archived their account in the past. Then you should just restore them, not add them again. Please filter your Team members list by 'Status' and choose 'Archived'. Then you will be able to locate this user and restore their account.
Sometimes users create a separate account by mistake when trying to join the company account. In this case, please instruct them to log in and close their individual account (they can do that on the Account admin tab). Then you will be able to add them to your account using the same e-mail.