Legally, yes, but it won't come as a shock that some employers (and employees) don't follow the law to the letter.
Since this is HN and many of us live in California, it’s worth pointing out that California doesn’t have a lower tipped minimum wage anymore, these people are getting $16 an hour before tips. The official reason is gone in this state, yet the tipping bs persists.
By definition, the server cannot get paid less than minimum wage for wage+tips, regardless of many people stiff the tip.
(Normally I wouldn't mention this since minimum wage is often lower than market rate anyway, but apparently min wage was significant enough for you to mention it.)