

Note that if a worker fails to get to minimum wage through tips, they are owed minimum wage by the employer.
However, minimum wage is pretty crap.
Your point stands that compensation should be baked in of course, it is just that normal minimum wage does kick in if the tips fail.





That does not say over report your tips to the IRS if tips are so low they would have forced your employer to pay a higher wage.
I could see making that judgement call if the employer is a dick but customers are usually exceptionally generous tip wise, and you had an isolated slow night. However if day to day the tips are normal, then taking the hit for your employer is just a recipe for continued exploitation.