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He was saying that's how it effectively works, and he's right.

The federal minimum wage for tipped employees is $2-ish with the caveat that if an employee isn't making on average $7.25 for the pay period when factoring in tips, the employer is legally obligated to make up the difference.

So if an employee's tips average out to the difference between tipped minimum wage and regular minimum wage, then all you've done is save the restaurant money. The employee was going to get that amount regardless.

It's only when the tipped amount exceeds the difference on average does the employee come out ahead.

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