The rapid spread of COVID-19 led to sudden lockdowns, impacting mobility, economic activities, and social interactions worldwide. It resulted in the informal labour force experiencing socioeconomic and mental health challenges, which led them to return to their native town. The primary aim of this research paper was to investigate the consequences and challenges of the sudden pandemic shock on internal migration among informal labourers in Bangladesh. A multi-cluster sampling technique was followed to collect primary data on nine areas of both the northern and southern parts of Dhaka city with the self-administered questionnaire. Various articles, reports, books, and newspapers were reviewed for secondary data. Adopting a mixed method approach, the study employed descriptive statistics, multivariate regression and Wilcoxon signed-rank test. FGD was conducted to understand in-depth gender disparities mental health severity and economic consequences. The key hypotheses were to evaluate the impacts of COVID-19 on informal workers’ socio-economic condition, mental health, gender-based inequalities, government aid effectiveness and information accessibility. The findings highlighted job displacements, income loss, and limited access to employment information. Informal migrants also faced a sizable portion of mental health disorders and highlighted a lack of administrative-level support for migrant workers. The paper identified immediate actions to strengthen social support systems for migrant workers, improve the accessibility of information networks and channels, and enable the implementation of gender-based policies and strong legislation to ensure their rights.