The employers have to make up the difference if tips don’t meet the rate for hours worked.

Is that true in all states? I thought I read recently that there were still holdouts.

Anyway, in the immediate term it would be terrible for most tipped staff who depend on that money for things like rent, food, gas, etc. For employers to pay more, they would likely need to raise prices; smaller restaurants in particular can operate on some pretty tight margins and I doubt the big guys will take less profit. Where that ultimately would go, I'm not sure.

I live in Japan now and we don't do tips here. Things are more expensive in menu price, but there's no magical 20% to pay after. We also have single-payer health insurance system. Businesses are required to do some health insurance stuff for full-time employees, but I don't know what what point/size. Even if the employee has to pay 100%, health insurance and pension are income-based. Rents are also generally less crazy. As with everywhere, food prices and inflation are issues here, but people are surviving. The bar down the street pays 1500/hour to start (minimum in Tokyo is a bit over 1000/hr) and that's increased for the late night portion leading to a higher amount of pay.