Introduction The widespread COVID-19 contagion in workplaces has created a new workplace hazard, albeit investigated mainly among health care workers. Work-environment factors are related to workplace infection risks and individual vulnerability factors, like older age, predispose workers to severe illness. The stress and anxiety associated with the concerns regarding workplace safety and COVID-19 repercussions are jeopardizing aging workers’ mental health (MH).

Objectives We aimed at investigating the individual and macro-level factors associated with declines in the MH of aging workers from different industry sectors. We hypothesize that higher perceived workplace safety is crucial in protecting their MH and mediates the work-environment influences.

Methods Using the Health, Ageing and Retirement in Europe (SHARE) data from COVID-19 survey (summer 2020) from 27 countries in Europe and Israel and additional data collected from pre-pandemic waves, we performed multi-level and mediation analyses to characterize work-environment, safety perception, socio-demographic, clinical, and national-level factors associated with MH among workers aged 50–70.

Results Multi-level analyses demonstrated that 24% of the aging workers experience MH declines characterized by East-West geographical European gradient associated with disease burden. The perceived workplace safety, which is low among 10% of the workers, is the strongest predictor- explaining 30% of their MH status and mediates the effects of work-environment aspects, such as workplace contagion risk. Being a woman, having financial difficulties, a higher vulnerability index (comorbidities and age>60), pre-existing mental morbidity, and the national high burden of COVID-19 are associated with declines in MH, whereas exclusively working on-site is protective.

Conclusion Evaluating workplace conditions and screening vulnerable sub-groups among the aging workers who are more prone to MH declines are imperative. Workplace interventions, integrated with individual targeted approaches to reduce the influence of work-environment factors on infection risks and mental distress, hence elevating workplace safety perception, are recommended.