Rubio’s Coastal Grill Leverages E-learning Initiative to Reduce “Penalty Pay” Costs

Rubio’s Coastal Grill is home to coastal inspired Mexican food with dishes like surf and turf, fish tacos, and lobster burritos. The restaurant chain has a total of 203 units with locations throughout California, Arizona, Nevada, and Colorado. Each state has a final pay law that determines the legal amount of time in which an employer must issue an employee’s last paycheck. In California, where about 75% of Rubio’s locations operate and the state with the strictest wage laws, an employee is eligible for up to 30 days of “penalty pay” if their final pay is not issued on time. Rubio’s depends on their general managers to handle the applicable paperwork, but sometimes navigating these tasks can be confusing, and one misstep can cost the company thousands of dollars.

The Consequence of Penalty Pay

General managers at all Rubio’s locations are held accountable for submitting termination paperwork and ensuring it is submitted in a timely and accurate manner after an employee leaves the company. Managers must determine when their final pay is to be issued depending on variables like state of location, notice of resignation, termination reason, and other factors. Under specific circumstances, a California employee who worked an average of 5 hours a week at $10.50 an hour at Rubio’s could potentially be paid as much as $1,575 in penalty pay.

Combating Penalty Pay with E-learning

At the beginning of 2018, Rubio’s recorded their penalty pay was between $7,000 and $10,000 per period. Over 90% of this loss was preventable. Rubio’s looked at their penalty pay training, which was completely paper-based, and decided the program was not sufficient. The written materials were not engaging, and managers were not absorbing any knowledge on the topic. To address this, the Rubio’s Training team and People Services team created an e-learning course to teach general managers how to correctly fill out paperwork, the importance of filling out termination forms, and the costs associated with penalty pay. The new course is more engaging, easier to understand, and even exhibits some familiar Rubio’s employees.

“An added benefit of the course is that we were able to showcase the People Services team,” said Melanie Johnson, Senior Manager of Training and Program Development. “Having different narrators allows us to give our restaurant a ‘face’ and helps managers feel more connected to our support team.”

Rubio’s deployed the course using the DiscoverLink Talent learning management system (LMS) platform, which allowed them to distribute and assign different versions of the course and track completions. They announced the course at the end of March and tasked their District Managers with ensuring every appropriate manager was trained by the end of May.

A Reduction in Final Pay Costs

The period prior to the deployment of the new course, Rubio’s saw more than $7,000 in penalty pay loss. Immediately after the course was implemented, Rubio’s saw a drop to about $5,000. The following period it dropped even further, resulting in a 50% reduction in penalty pay after the introduction of the course. Additionally, Rubio’s noticed a reduction in the total number of penalty pay cases.

“Throughout 2019, penalty pay will remain a focus for the Training team, and the course is now a permanent part of our Manager-In-Training program,” said Johnson.

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