Thirty days. That’s how long an employer usually has, after service of a wage and hour class action complaint, to decide whether to move the case to federal court under the Class Action Fairness Act (CAFA). Removal is available when the class has at least 100 members, the amount in controversy tops $5 million, and at least one class member is a citizen of a different state than one defendant. CAFA’s home-state exceptions rule out many California employers, and the rest have to back up their math.
What does CAFA require for federal jurisdiction?
Three things: size, money, and minimal diversity.
28 U.S.C. § 1332(d)(2) gives federal courts jurisdiction over a class action “in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs,” where “any member of a class of plaintiffs is a citizen of a State different from any defendant.” The same section says CAFA doesn’t apply when “the number of members of all proposed plaintiff classes in the aggregate is less than 100.” Class members’ claims are added together: under § 1332(d)(6), “the claims of the individual class members shall be aggregated.”
Minimal diversity is a low bar for an employer incorporated or headquartered outside California. One California class member is enough. The harder question for many California employers is whether a mandatory exception sends the case back.
When must a federal court send the case back to state court?
When the case is too local. CAFA has two mandatory exceptions that matter most to California employers.
The home-state exception in § 1332(d)(4)(B) requires the court to decline jurisdiction where “two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.” A company incorporated and headquartered in California, sued by a class of its California workers, usually lands here.
The local controversy exception in § 1332(d)(4)(A) applies when more than two-thirds of the class are citizens of the forum state, at least one significant defendant is a forum citizen, the principal injuries happened there, and no similar class action was filed against any defendant in the previous three years. That last condition is worth checking. A prior class action over the same practices, even one that settled, can keep this exception from applying.
There’s also a discretionary middle zone. Under § 1332(d)(3), where between one-third and two-thirds of the class and the primary defendants are forum citizens, the court “may” decline jurisdiction after weighing factors the statute lists.
How does an employer prove the case is worth more than $5 million?
With its own payroll data and assumptions tied to the complaint.
The Supreme Court set the pleading standard in Dart Cherokee Basin Operating Co. v. Owens (2014) 574 U.S. 81: “a defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” The Court added that the allegation “should be accepted when not contested by the plaintiff or questioned by the court.” Evidence comes in only if the plaintiff moves to remand or the judge asks.
When that happens, the Ninth Circuit lets employers build the number from reasonable assumptions. In Arias v. Residence Inn by Marriott (9th Cir. 2019) 936 F.3d 920, the court said a removing defendant may rely on “a chain of reasoning that includes assumptions,” but such “assumptions cannot be pulled from thin air but need some reasonable ground underlying them.” It explained that assumptions in the defendant’s “chain of reasoning need not be proven.” In Perez v. Rose Hills Co. (9th Cir. 2025) 131 F.4th 804, the court vacated a remand order where the employer assumed a violation rate drawn from the complaint’s own wording, explaining that assumptions can be “founded on the allegations of the complaint” and “do not necessarily need to be supported by evidence.”
In practice, the employer’s calculation looks like this: headcount and workweeks from payroll, an average hourly rate, an assumed violation rate for each claim tied to words like “regularly” or “at times” in the complaint, the statutory penalties for wage statements and waiting time, and a fee estimate. Arias also held that when a statute provides for fee recovery, prospective attorneys’ fees count toward the amount in controversy.
| Removal question | Source | What it means for the employer |
|---|---|---|
| Class size | 28 U.S.C. § 1332(d)(5)(B) | Fewer than 100 putative class members means no CAFA jurisdiction |
| Amount in controversy | 28 U.S.C. § 1332(d)(2), (d)(6) | Aggregate claims must exceed $5 million, exclusive of interest and costs |
| Pleading the amount | Dart Cherokee, 574 U.S. 81 | A plausible allegation is enough unless contested |
| Proving the amount | Arias, 936 F.3d 920; Perez, 131 F.4th 804 | Reasonable assumptions tied to the complaint, with payroll data behind them |
| Home-state and local controversy | 28 U.S.C. § 1332(d)(4) | Mostly-California class plus California primary defendants usually stays in state court |
| Deadline | 28 U.S.C. § 1446(b) | 30 days from receipt of the complaint, or from a later paper showing removability |
| Appeal of a remand order | 28 U.S.C. § 1453(c)(1) | Application to the court of appeals within 10 days of the order |
How much time does the company have to remove?
Usually 30 days from receiving the complaint, with a second window if a later paper shows the case is removable.
28 U.S.C. § 1446(b)(1) says the notice of removal “shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading.” If the complaint itself doesn’t show removability, § 1446(b)(3) opens a new 30-day window after receipt of “an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.”
Two CAFA-specific rules help defendants. 28 U.S.C. § 1453(b) lifts the time cap that section 1446(c)(1) places on ordinary diversity removals, and it says a class action “may be removed by any defendant without the consent of all defendants.” So a co-defendant staffing agency’s reluctance won’t block a CAFA removal.
Thirty days goes quickly when someone has to pull four years of payroll data, confirm headcount, and model each claim. That work should start the day the complaint arrives, not after the answer is drafted. The firm’s guide to the first 60 days of a wage and hour class action covers the other decisions that land in the same window.
Can a PAGA lawsuit be removed under CAFA?
No. In Baumann v. Chase Investment Services Corp. (9th Cir. 2014) 747 F.3d 1117, the Ninth Circuit held “that CAFA provides no basis for federal jurisdiction” over a PAGA action, because “PAGA is not sufficiently similar to Rule 23 to establish the original jurisdiction of a federal court under CAFA.”
That’s why plaintiffs’ lawyers sometimes file a PAGA-only case when they want to stay in state court. When a complaint pleads both class claims and PAGA claims, the class claims drive the CAFA analysis, and the PAGA claim’s value doesn’t go into the class total.
Is federal court actually better for the employer?
Often, but not always, and the choice deserves a real look instead of a reflex.
Federal court brings Rule 23’s class certification standards, Rule 12 motions that can test thin wage claims early, and judges who handle many class cases. Discovery is governed by the federal rules’ proportionality limits. On the other side, removal costs money up front, the amount-in-controversy filing puts the employer’s own exposure model in the public record, and a remand fight can delay the case’s merits for months. If remand is granted, § 1453(c)(1) allows an application to the court of appeals “not more than 10 days after entry of the order,” which is a second deadline the company has to be ready for.
The safer course is to make the removal decision with the exposure model in hand. A company that removes on a thin calculation and loses a remand motion has spent money and shown its hand.
What to do in the first days after a class complaint is served
- Put a litigation hold on payroll, timekeeping, and scheduling data for the full class period, plus the policies, handbook versions, and arbitration agreements in effect during it.
- Calendar the 30-day removal deadline and the state-court response deadline, check for arbitration agreements with class waivers, and give notice under any EPLI policy.
- Identify the managers and payroll staff who know the practices the complaint attacks, and stop any action against the named plaintiff that could look like retaliation.
- Pull the data the removal calculation needs: headcount by state of residence, workweeks, average rates, and separation counts for waiting time penalties.
- Talk to a lawyer before responding to the complaint, contacting putative class members, or discussing settlement.
The firm’s California wage and hour defense page describes how it approaches class and PAGA claims from the first response through trial.
FAQ
What is the deadline to remove a wage class action under CAFA?
The notice of removal generally must be filed within 30 days after the employer receives the complaint under 28 U.S.C. § 1446(b)(1). If the complaint doesn’t show the case is removable, a new 30-day period starts when the employer receives an amended pleading, motion, order, or other paper showing that it is. Section 1453(b) also lifts the outer time cap that applies to ordinary diversity removals.
Does the employer have to admit liability to show the amount in controversy?
No. The amount in controversy is what the plaintiff puts at stake, not what the employer thinks it owes. The Ninth Circuit’s Arias decision allows reasonable assumptions drawn from the complaint, and those assumptions don’t have to be proven. The employer can model exposure for removal while denying every claim.
Can a California company remove a class action brought by its California employees?
Often not. If two-thirds or more of the class members and the primary defendants are California citizens, the home-state exception in 28 U.S.C. § 1332(d)(4)(B) requires the federal court to decline jurisdiction. A corporation’s citizenship includes its state of incorporation and its principal place of business, so the analysis starts with where the company is organized and headquartered.
Are attorneys’ fees counted toward the $5 million?
When a statute provides for fee recovery, as many Labor Code provisions do, the Ninth Circuit counts prospective attorneys’ fees in the amount in controversy. Arias v. Residence Inn said so directly. The fee estimate still has to be reasonable and is often expressed as a percentage of the claimed damages and penalties.
If your company has been served with a wage class action
If your company has been served with a wage and hour class action in superior court, the removal window is short, and the payroll data usually decides whether federal court is available. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including class actions over unpaid overtime and missed breaks. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
28 U.S.C. § 1332; 28 U.S.C. § 1446; 28 U.S.C. § 1453; Dart Cherokee Basin Operating Co. v. Owens (2014) 574 U.S. 81; Arias v. Residence Inn by Marriott (9th Cir. 2019) 936 F.3d 920; Perez v. Rose Hills Co. (9th Cir. 2025) 131 F.4th 804; Baumann v. Chase Investment Services Corp. (9th Cir. 2014) 747 F.3d 1117.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.