I *think* they are also taxed as though a certain portion of their wages are
assumed as tips.

That is correct. My kids have all bartended or waited tables. This whole
thing is great for restarunts especially the big corporate ones. Your paycheck
usually equals zero! The restarunt usually says "you billed this amount so we
figure you made this amount in tips so we took out this much in taxes so we owe
you nothing" What a deal! Free labor! And if a customer skips out the door
without paying they make the server pay.
S/V Express 30 "Ringmaster"
Trains are a winter sport