I counted only 7 states where it is not true based on the state laws and 1 state where it was not true for large employees. It is generally true in most states in practice, and is how tipping works per federal laws. I should have probably have mentioned I was speaking to the federal law and local/state/city laws can work differently in some areas.

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.