The COVID-19 pandemic has led to widespread changes in the way that people work, including an increase in remote work and changes in group dynamics. Social loafing, the phenomenon of reduced individual effort in group settings, has been widely studied in the literature. However, less is known about the potential impacts of social loafing on mental health and turnover intention in this relationship. In this study, we hypothesized that social loafing would be related to turnover intention and that mental health would mediate this relationship. To test these hypotheses, we conducted a cross-sectional survey of 700 full-time tourism employees in Egypt. The obtained data were analyzed by Partial least squares structural equation modeling (PLS-SEM). Our results indicated that social loafing was significantly related to turnover intention and negative mental health consequences significantly mediated this relationship. The results showed that stress (as a dimension of mental health) experienced by employees may act as a mediator between social loafing and turnover intention. On the other hand, depression and anxiety were not observed to have a similar mediating effect. This implies that stress could play a vital role in the decision-making process of employees who are contemplating leaving their job due to social loafing. These findings suggest that interventions aimed at reducing social loafing may have the added benefit of improving mental health and decreasing turnover intention in the workplace.