Portland bagel shop hikes prices, eliminates tipping to guarantee consistent wages

PORTLAND, Ore. (KOIN) — In order to guarantee consistent wages for employees, a Portland bagel shop has hiked its prices by 20% and eliminated tipping.

Bernstein’s Bagels on North Russell Street announced the new pay model earlier this week. The business said employees have typically earned an average of 20% in tips from customers, but removing tips altogether ensures that “bagelers” earn the same regardless of how busy the shop is.

“Instead of basing this portion of wages on the inconsistent nature of sales, we are now incorporating it directly into the hourly pay that our employees take home,” Bernstein’s explained on their website. “Because it’s better to know exactly how much you’re earning at your job.”

The bagel shop additionally said employees have received “substantial hourly raises across the board.” According to the business, staff members will also see an expanded benefits package.

Even though the menu will feature more expensive items, owners anticipate that overall costs will be about the same for customers who usually tip.

“Some restaurants are adding in automatic service fees at the end of the transaction, but we think this is more straightforward and transparent,” Bernstein’s said.

The bagel shop isn’t the first in Portland to adjust its pay model for employees. The owners cited other businesses that have implemented similar systems, including Cafe Olli, Gracie’s Apizza and Kachka.

Kachka eliminated optional tipping in early 2022, replacing it with an automatic 22% service fee and offering staff a minimum hourly wage of $25. The Eastern European restaurant also implemented profit-sharing and offered employees free health insurance.