Yeah, I don't get it either and I'm American. I've spent some time in Japan and the lack of tipping is among the things I love about it. Not only do I not have to worry about it, but I generally feel more confident that the worker is getting a fair wage.
I worked as a delivery driver in Boulder, Colorado for a year. They paid me $4.00/hr because they expected me to make up the difference in tips. Though I often did, not everyone does and the accepted practice of tipping temps employers into thinking they can get away with paying ridiculous wages.
Employers are always obligated to pay at least minimum wage in the US for tipped employee jobs. The employer can set a baseline like $4.00 per hour plus tips, but if the resulting wage is not at least minimum wage, then the employer must pay minimum wage regardless ("make up the difference").
Formulas for tipping can be used to raise a wage above minimum wage, but not drop it below minimum wage. Employers are consequently not paying unlivable wages (or not below the minimum). They are just advertising formula for how you can get a bonus beyond the minimum wage.
That's because tipping in America makes no sense at all. You're "supposed" to tip 18-20%. So why not just put that into the price of the dish you are eating in the first place? I hate nothing more than seeing something like '19.95' on a menu, but then it ends up costing something like '26.29' with tax and tip. What's the point?
I worked as a delivery driver in Boulder, Colorado for a year. They paid me $4.00/hr because they expected me to make up the difference in tips. Though I often did, not everyone does and the accepted practice of tipping temps employers into thinking they can get away with paying ridiculous wages.