Workers are required to pay taxes on tips, but employers are only required to report cash tips at something like 9% of sales. This means that when workers were

Workers are required to pay taxes on tips, but employers are only required to report cash tips at something like 9% of sales. This means that when workers were mainly tipped in cash, they could hide a fair amount of their tip income if they were averaging more than 9% tips -- though they were legally required to report it, not reporting it was essentially risk-free. I assume that charged tips are reported by their actual amount.