Failing to compensate employees fairly can lead to severe, and sometimes catastrophic, consequences for businesses. One stark example recently came to light on Reddit, where a user known as u/slw_motion_trainwrck detailed how his departure as an underpaid IT employee triggered a financial disaster—reportedly costing his former employer $40 million in a single day.
A Hidden Linchpin in the System
The Redditor worked for a major multinational manufacturing firm in the automotive components industry. As the sole IT support across three factories, he was essential to keeping operations running. Despite the workload and critical nature of his role, he was paid just $31,000 per year—a fraction of what his predecessor earned.
His responsibilities were immense. He worked an average of 16 hours a day, seven days a week, without breaks for holidays or personal occasions. For over a year, he sacrificed weekends, Christmas, his birthday, his wife’s birthday, and even his children’s birthdays to keep the company operational.
After enduring relentless overwork and being offered a meager $800 raise, he decided to leave. Upon submitting his two-week notice, the company reportedly retaliated by making his final days miserable rather than attempting to retain him or plan for a smooth transition.
The $40 Million Fallout
The real consequences emerged the day after he left. Without him, ten automotive assembly lines shut down due to IT failures. According to the Redditor, each minute of halted production cost $218,000, as contractual penalties with car manufacturers kicked in. These companies rely on uninterrupted supply chains, and even brief delays can incur massive fines.
In just one day, the company reportedly lost $40 million, underscoring how undervaluing a single employee in a mission-critical role can be financially ruinous. The shutdown wasn’t just a technical failure—it was a failure of leadership, compensation policy, and risk management.
The Value of Irreplaceable Talent
Sam Dogen, founder of Financial Samurai and author of Buy This, Not That, stresses that companies often underestimate the value of employees who are deeply embedded in operations. He suggests that if a company would struggle within a week of an employee’s absence, that person is irreplaceable—and irreplaceable employees should be compensated accordingly.
Dogen also recommends employees assess their worth not by online wage averages, but by speaking directly with peers and colleagues. Offering your own salary first, he says, can help others feel comfortable sharing ranges in return.
For those in high-value roles, Dogen even advocates considering negotiated severance as a path to better opportunities. He successfully did this in 2012, securing a package that covered six years of living expenses, enabling him to pursue financial independence.
Health and Sustainability in the Workplace
Beyond salary, workplace sustainability is crucial. Jack Bly, a fitness and productivity expert, emphasizes the link between employee health and output. He argues that good sleep, nutrition, and exercise lead to higher energy and productivity, while unsustainable workloads—like the 16-hour days described by the Redditor—lead to burnout and breakdown.
Bly also critiques the focus on hours worked instead of results delivered. He poses a critical question: “Would you rather have someone who gets the job done in 3 hours or someone who takes 8?” In the Redditor’s case, efficiency was not the issue; the problem was overwhelming workload and lack of support.
A Broader Problem: Misclassification and Systemic Underpayment
This dramatic case fits into a larger pattern of labor abuse, particularly the misclassification of employees as independent contractors, which enables companies to evade fair wages and benefits.
In New Jersey, a 2020 audit of just 1% of businesses uncovered over 7,000 misclassified workers, leading to $443 million in underreported wages and $13 million in lost contributions to unemployment and disability funds.
Officials like Labor Commissioner Robert Asaro-Angelo and State Senator Steven Oroho have warned that such practices unfairly disadvantage ethical employers and cheat workers out of essential protections. Meanwhile, State Senator Troy Singleton has emphasized the damage this causes to both the economy and individual lives, particularly in industries like construction.
Peter Chen, a policy analyst at New Jersey Policy Perspective, adds that many misclassified workers meet all the legal criteria of full employees but are denied basic rights like overtime, health insurance, and job security. He points to outdated federal labor laws and loopholes that allow this exploitation to continue unchecked.
Legal Standards and Enforcement
New Jersey uses the ABC Test to determine worker classification. According to this test, a worker is presumed to be an employee unless the employer proves all three of the following:
- The worker is free from direction and control in their work;
- The work is outside the usual course of the company’s business or performed off-site;
- The worker is engaged in an independently established trade or business.
Many companies, either willfully or unknowingly, fail to meet these standards. Commissioner Asaro-Angelo warns that merely labeling someone an “independent contractor” doesn’t make it so legally. The state has since increased enforcement powers, including issuing stop-work orders to non-compliant businesses.
The Human Cost of a Broken System
The story of the underpaid IT professional is more than a viral anecdote—it’s a warning. Human capital should not be treated as a disposable or undervalued expense. When companies ignore the well-being, compensation, and long-term sustainability of essential employees, they don’t just risk turnover—they risk existential financial collapse.
Ultimately, the true cost of doing business isn’t found in fair wages or adequate staffing. It’s revealed in what happens when those investments are ignored—when one overworked, underpaid individual walks away, and an entire operation grinds to a halt.
