Since overflow hides what overflows, you may instead draw the border on the background or with an inset shadow , so it is drawn on the whole height of cntainer : DEMO
.menu-wrapper {
display: flex;
flex-direction: column;
width: 200px;
background-color: #ccc;
box-shadow: inset 5px 0 #bbb;/* here draws an inside left border via shadow */
height: 300px;
height: 100px;
overflow:auto;
}
.menu-item {
padding: 20px;
cursor: pointer;
}
.menu-item:hover {
background-color: #444;
color: #fff;
border-left: 5px solid red;
}