The global outbreak of COVID-19 pandemic has revolutionized the traditional workplace culture, accelerating the shift to remote working systems such as telecommuting and Work from Home (WFH). This transition is essential for the optimization of the business operations that is brought with it a complex interplay of psychological impacts— both positive and negative — on employees worldwide. This systematic literature review paper is documented to examine eight peer-reviewed research articles published between 2020 and 2025, focusing on the mental health or psychological implications of remote work or work from home (WFH). The selected research articles, retrieved from the Springer database, span diverse geographical contexts including India, Malaysia, the UK, Syria, Bangladesh, and New Zealand. Key findings reveal that remote working has fostered improved work-life balance, greater job satisfaction, and enhanced employee motivation in certain sectors. However, the negative impacts like technostress, job insecurity, social isolation, and psychological fatigue are equally prominent. On the other hand, supportive leadership, compassion, and organizational empathy have emerged as crucial mediators in maintaining employee psychological well-being. The study highlights the importance of adaptive management practices and policy-driven frameworks to mitigate mental health challenges in remote work or WFH environments. Since the remote working system becomes a lasting fixture in the post-pandemic world, this review underscores the need for mental health support system and sustainable functional models for ensuring psychological resilience among employees.