ObjectivesThe stress and anxiety associated with the predisposition of ageing workers to severe COVID-19 illness, once occupationally infected, jeopardise their mental health. This study aimed to investigate the association between individual level, work environment exposure factors and perceived workplace safety with a decline in mental health of ageing workers from different industry sectors.DesignObservational study, prevalence assessment of survey added to longitudinal cohort data.SettingThe Survey of Health, Ageing and Retirement in Europe (SHARE) from 27 countries in Europe and Israel participating in the COVID-19 survey (summer 2020) and having prepandemic waves’ SHARE data.ParticipantsWorkers aged 50–70 (n=6449) who attended their workplaces at least partially after the pandemic broke out.Primary outcome measurePerceived decline in mental health compared with preoutbreak status.ResultsMultilevel analyses demonstrated that 24.5% (95% CI 23.5% to 25.5%) of ageing workers in Europe experienced mental health decline associated with national-level self-reported COVID-19 burden. Workplace safety perception was the strongest predictor, as each one-point increase in unsafe perception was associated with 60% of mental health decline (OR=1.6, 95% CI 1.47 to 1.74), explaining 30% of increased reported mental health symptoms of ageing workers. Safety perception mediates the mental health outcomes of the work environment, such as workplace contagion risk and work location. Female gender (OR=1.77, 95% CI 1.55 to 2.02), financial difficulties (OR=1.19, 95% CI 1.1 to 1.28), higher vulnerability index (comorbidities, age >60) (OR=1.11, 95% CI 1.05 to 1.18), pre-existing mental problems (OR=1.78, 95% CI 1.55 to 2.04) and increased national burden of COVID-19 (OR=1.01, 95% CI 1.0 to 1.02) were associated with declines in mental health, whereas exclusively working on-site was protective.ConclusionVulnerable subgroups for mental health declines among ageing workers were revealed, which warrant their screening and employers’ evaluation of workplace conditions of ageing workers to prevent mental health-related implications. Workplace interventions should aim to reduce work environment influences on infection risk and mental distress.