(1)    In this section:

      (a)    “Compensatory time” means hours during which an employee is not working, which are not counted as hours worked during the workweek or other work period classified by the department by rule promulgated under s. 103.02 for purposes of calculating overtime compensation, and for which the employee is compensated at the employee’s regular rate of pay.

      (b)    “Employee” has the meaning given in s. 104.01 (2).

      (c)    “Overtime compensation” means the compensation required to be paid for hours worked during periods that the department has classified, by rule promulgated under s. 103.02, as periods to be paid for at the rate of at least 1.5 times an employee’s regular rate of pay.

   (2)   An employer described in s. 103.01 (1) (b) may provide an employee, in lieu of overtime compensation, compensatory time off as permitted under 29 U.S. Code § 207 (o), as amended to April 15, 1986.