Florida Statute 222.11 exempts for creditors salary and other compensation for personal services paid to the head of household of a Florida family. Many closely held businesses and self employed persons confuse the asset protection of this statute. The confusion centers over the difference between money received from the business as salary and money received as distribution of profits. Only compensation for personal services to the business is protected from garnishment by Florida Statute 222.11. Only compensation paid to the business owner in his role as employee are protected. Therefore, it is important for the small business owner to document his status as employee for purposes of the wage exemption statute. Documentation includes factors such as: (1) payment of fixed amount of salary on a regular basis. Payments to the owner in varying amounts as needed to pay the owner’s personal family expenses is in the nature of profit distribution rather than employee compensation (2) existence of a written employment contract between the corporation and the owner (employee), and (3) payments conditioned upon the time the owner actually works at the business rather than amounts based upon the business revenue or profit.
Also, remember that there can only be one head of household in any family. In a two income marriage, the spouse who earns the most money will usually be considered the head of household and the person whose wages and other compensation qualify for protection under the wage exemption statute. The lower-earning spouse, regardless of how much money earned, will have their wages exposed to wage garnishment by their individual creditors