It's not quite that - in places with a lower "tipped minimum wage," the employer only gets to pay the lower hourly rate if the employee doesn't earn the standar

It's not quite that - in places with a lower "tipped minimum wage," the employer only gets to pay the lower hourly rate if the employee doesn't earn the standard minimum wage from tips. The employee is supposed to report their tips, usually per pay period, and if it adds up to less than minimum wage, the employer is supposed to make up the difference. Doesn't work out like that in practice, though. My wife waited tables for years when she was young and most of those places just paid enough to show $0.00 on the paycheck after payroll/SS taxes and the like. It also works out to be essentially what Instacart and DD are doing, but with a federal/state mandated "floor" on how low they can pull the hourly from the tips.