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At least five states are considering requiring full minimum wages for tip earners this year
(www.nbcnews.com)
this post was submitted on 07 Jan 2024
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They don't really avoid taxes now. Anything tip charged to a card gets taxed. Cash tips might not be claimed but that's very little for most tipped workers. Additionally tipped workers paid below minimum wage make the employer responsible for making up the difference if they don't have enough tips reported to avg min wage. That means the employers are very motivated to ensure their employee tips are reported.
Also, even years ago when cash tips were a significant % of tips, being predominantly low wage workers those employees would get virtually all their taxes back after filing a return as well. They wouldn't get SS taxes back but otherwise for most not reporting tips didn't amount to a lot of missed taxes. There were some exceptions where people made decent money - maybe high end restaurants and salons - but today with little cash use there aren't many taxes missed.