It's because wages here are all effed up. Minimum wage is around 7.50 USD per hour, and tipped minimum wage usually is between 3.50 and 5 USD an hour.
No, it isn't. Even if you are a tipped employee, your employer cannot pay you less than the minimum wage. They can credit a portion of your tips against your wage, but that does not reduce their obligation to pay you at least minimum wage.