(a) This section applies only to a municipality with a population of one million or more that has not adopted Chapter 143.
(b) Subject to the federal Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.), a municipality may but is not required to establish a system under which compensation is paid or compensatory time off is allowed for overtime worked by the following officers and employees of the municipality’s police department:
(1) a police officer who has a rank above the rank of captain and whose appointment to the officer’s current rank was not based at least in part on the officer’s performance on a competitive examination; or
(2) a civilian who receives a salary greater than the lowest base salary that the municipality pays a captain and whose appointment to the civilian’s current position was not based at least in part on the civilian’s performance on a competitive examination.