Federal minimum wage for tipped workers is $2 and some change.
Legally if they end up making below minimum wage ($7.25 federally I believe, some areas are higher) between tips and wages the employer needs to make up the difference. Obviously with some of it being cash it’s difficult to track and prove, so realistically they won’t make up the difference.
I’m not for tipping culture, but realistically they’re usually doing better than people making minimum wage without tips. I knew someone working at a DQ about a decade ago making $5.25/hour without tips. Minimum wage was still $7.25 back then, but apparently family owned businesses have a minimum wage of $5.25. Not sure if that’s true, but they were able to sell it to their employees.