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One way or another, you're paying those employees wage. One of them doesn't get taxed or advertised is all.
Yes and no. All tips are supposed to be reported to the IRS. Whether they are or not is not really relevant. What really matters is that the customers aren’t forced to do an owners job. If an owner needs their customers to prop up their employees then the owners shouldn’t be in business.
I used to make $2.35/h when I was in the service industry. Without my customers I would’ve been fucked. What’s worse is on a slow night, I really did get fucked.
I think that should be the point, employees should not be taking on the risk of a business doing poorly. That's the business owner's responsibility and risk, to be mitigated by them. Not screwing over a waiter because it was a slow night. Or because they were unlucky to work a tuesday night over a busy Saturday night.