Comment by verall

I knew someone who worked a graveyard shift at a Waffle House in NC. After their first month, when tips were distributed, they did not make the federal minimum wage, so they had to request additional pay to get to minimum wage (IIRC it was not automatic).

Waffle house then opened an "inquiry" since if they weren't making minimum wage through tips, it must have been because their service was poor (of course it's actually because it was a weekday graveyard shift).

They got their additional $30 or whatever and were then let go.

So while I agree it is illegal to pay less than federal minimum wage, even with tips, but in practice the system is built such that for poor workers in poor areas, they will frequently make less than minimum wage.

Although probably much less nowadays since the $7.25 is still the federal minimum wage and it's pretty hard to find people desperate enough to work for that little money since recent inflation.