As a former expatriate whose husband worked for a very large corporation overseas, I can tell you that paying relocated U.S. employees more than local employees is standard practice for most large companies. Your relocated employee may have many expensese that his/her local counterpart does not, includng the cost of selling or renting a home, home leave travel expenses, lost income from a spouse who gives a job to move, and possibly even private school tuition if the local school system is not up to par. Back when I was overseas, there was also something called a "hardship allowance" if you were assigned to a country that was particularly diffiucult to live in for policital or social reasons. But the bottom line is that you will probably have a very tough time getting you U.S. employees to relcoate unless you pay them a decent premium over local wages.