Originally Posted by
leonidas
Yes, their stated wage may be less than minimum, but the employer is supposed to pay the difference if the actual wage+tip falls below the minimum.
Fixed that for you.
In practice, this sometimes doesn't happen because of flawed tip reporting or just generally crappy business practices.
There's also the aggregating function - an employee has a great day and makes double minimum wage in tips, but then gets zero tips the rest of the pay period because they're put on trash duty and the workplace doesn't pool tips. If their total reported wage+tip for that period is still at least (minimum wage)*(hours worked), the employer can get away with not making up the difference for all the other days.
What is supposed to happen often does not match with what actually does happen. Sadly employees put up with it because they are unsure about being able to get another job and/or would rather stick with the devil they know.