The accident happened when the carnival worker stepped in front of a ride just an hour and a half into the fair's opening day. Fair officials say it happened on a small ride called "The Wacky Worm."
The employee, who was not the ride operator, opened a gate and stepped in front of the figure eight roller coaster.
The man's severed leg was wrapped in ice and he was taken to the hospital where surgeons are trying to reattach his limb which was severed below the knee.
"The thing hit him and the kid said, 'I thought this man was going to hit me,'" said Yvonne Schleth.
Schleth, who was waiting in line, says the coaster severed the man's leg clean off from below the knee. She called for a bucket of ice.
"I picked up the leg myself. It still had the sock on it and the shoe was about five feet away. I shoved it down in the ice, and pushed it down as far as I could and that was about it," said Schleth.
She says she told the children on board to look away, but by that time a crowd of mostly teens had gathered.
"It was all kind of gruesome, so you know we glanced then looked away. Eeww," said Esaia Gonzalez.
The victim, a man in his 20s from the East Bay, has worked for the Midway Of Fun company for four months. The company's CEO says the employee is a gate keeper at the Starship 2000 ride and had no reason to be at the Wacky Worm.
Fair officials say there was no operator error or equipment malfunction. They are still trying to figure out why the employee walked in front of the coaster.
"He would have to literally walked over to the ride, removed a piece of the fence panel, stepped inside the ride, replace the piece of fence panel, and then turn around and step over some bracing to step over the track of the ride. There was a lot of effort," said ride owner Harry Mason, CEO of Midway of Fun. "I don't know if he thought he could beat the train or... we don't know. It doesn't even make any sense."
Midway of Fun is a company based out of Oroville, California. It had one accident related complaint filed with Cal OSHA in May of 2008 when a circular chain swing ride collapsed, injuring 23 people at the Calaveras County Fair. Three of those people were seriously injured.
The ride's owner says the 2008 incident and Wednesday's incident are completely unrelated. He says the prior incident was a mechanical failure, and believes this new incident was human error.
Mason says they have a lot of training in place to teach workers how to be safe.
The employee's name has not been released, so we don't know his condition or the outcome of the attempt to reattach his leg.
Cal OSHA has cleared the ride after their investigation.