While infection rates, lockdown policies, and labor market conditions substantially varied across COVID-19 waves, the majority of evidence on young adults' mental health remains focused on initial responses in early 2020. The variability of the relationship between economic activity and mental health over time therefore remains poorly understood in this age group. Using linear mixed models, we investigated the relationship between current activity and changes in activity and mental distress (GHQ-12) among 1,390 young adults aged 16-34 via the UK Household Longitudinal Study COVID-19 survey. The association was explored in the first (from April to July 2020) and second (from September 2020 to March 2021) infection waves. Current activity was defined as "not working", "working <17.5 hours/week", "17.5-35 hours/week", and "> = 35 hours/week". Changes in activity were derived from current and pre-pandemic working hours and divided into four categories: "working with no reduced hours", "working fewer hours", "no longer working", and "did not work before the pandemic". During the first wave, no association reached statistical significance. During the second wave: 1) compared to "currently not working", working 35 or more hours was associated with decreased distress (b = -1.54; 95%CI -2.39, -0.69) and working less than 17.5 hours was not (b = -0.62; 95%CI -1.66, 0.41); 2) compared to "working with no reduced hours compared with before the outbreak", no longer working was associated with increased distress (b = 1.58, 95%CI 0.61, 2.55) and working with reduced hours was not (b = 0.47, 95%CI -0.24, 1.17). Above the mental health inequalities experienced at the start of the pandemic, full-time work-even with variation in work hours-continued to be a protective factor against mental distress among young adults during the second wave in the UK. Stable, full-time work can better support this age group's mental well-being over time.