Of course it's illegal to steal tips, but actually enforcing that is another matter. Companies will blatantly build illegal business models. And of course some developer coded this automated tip stealing.
Firing one guy because he won't steal from your customers won't fly if the union tells your entire development team to walk and they'll cover wages until they get a better job.
Fraud n. the intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right.
RCW 49.46.020 section 3:
"Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage."
RCW 49.46.020 section 3:
"Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage."
Source: https://app.leg.wa.gov/RCW/default.aspx?cite=49.46.020