12 Aug Should a Relocated Employee Be Compared With Colleagues at Home—or in the Host Country?

An employee working in Paris accepts a three-year assignment in Silicon Valley. Her salary remains tied partly to France, but the move to Northern California comes with housing assistance, tax support and other benefits designed to make an international assignment financially workable.

Now consider a deceptively simple question:

Who are her peers when the company compares pay?

The employees she left behind in Paris? Colleagues doing similar work in Silicon Valley? Other international assignees? Or some combination of all three?

The question becomes particularly interesting in Northern California, where housing costs alone can substantially change the economics of an international assignment. An allowance that makes an assignee’s total compensation appear significantly higher than a colleague’s may not represent additional reward at all. It may simply compensate for the cost of temporarily establishing a household in one of America’s most expensive labor markets.

Global mobility teams have dealt with differences like these for years. But growing pay transparency on both sides of the Atlantic is giving them greater significance.

Europe is changing the conversation around pay

The European Union’s Pay Transparency Directive is designed to strengthen the principle of equal pay for men and women performing equal work or work of equal value. EU member states were required to transpose the directive into national law by June 7, 2026.

For conventional employees, the principle may appear relatively straightforward. For internationally mobile employees, determining what constitutes comparable pay can become considerably more complicated.

A worker may physically perform a job in Silicon Valley while remaining financially, contractually or organizationally connected to an employer in France.

As Mercer’s analysis of the directive and mobile employees explains, the treatment of internationally mobile workers can depend on factors such as the employing entity, payroll ownership, contractual arrangements and how individual EU countries implement the directive.

That is where a European transparency initiative becomes a much broader global mobility question.

International assignments were designed to create differences

Mobility compensation has rarely been about making every employee’s package identical.

Someone accepting an international assignment may receive housing assistance, cost-of-living adjustments, tax equalization, education support, relocation expenses or hardship allowances. A locally hired employee performing similar work may receive none of those benefits.

There can be perfectly legitimate reasons for those differences.

But greater transparency puts more pressure on employers to explain them.

The EU directive requires employers to establish pay structures that allow comparisons based on objective, gender-neutral criteria. These can include skills, effort, responsibility and working conditions.

That distinction matters enormously in global mobility.

A relocated executive and a locally hired executive may perform substantially similar work while experiencing very different circumstances. One may have moved a family across an ocean, entered a different tax system and assumed significant temporary housing and relocation costs.

The challenge is not necessarily eliminating those differences. It is understanding and documenting why they exist.

Silicon Valley adds another layer

Moving our hypothetical employee from Paris to Silicon Valley introduces another complication because California has its own increasingly transparent compensation environment.

Under California’s pay transparency requirements, employers with 15 or more employees must include pay scales in job postings. Employees can also request the pay scale for their current positions.

California’s Equal Pay Act adds another important consideration. Employees do not need identical job titles for comparisons to arise. The law looks at “substantially similar work” based on skill, effort and responsibility and performed under similar working conditions.

Suppose the employee arriving from Paris receives a salary partly based on her French compensation, temporary corporate housing and relocation assistance while perhaps retaining benefits connected with her home-country employment.

A locally hired California employee performing substantially similar work could have a very different package.

Which differences represent compensation for the job itself, and which simply reflect the cost of getting someone from Paris to Northern California?

That question may become increasingly important.

What exactly counts as pay?

Base salary tells only part of the story.

California’s equal-pay framework can encompass forms of compensation beyond salary, including bonuses, stock, stock options and benefits.

Europe is similarly taking a broad view. A Mercer review of the EU Pay Transparency Directive notes that pay can encompass variable compensation and benefits provided in cash or in kind.

For an international assignee, those additional components can represent a substantial portion of the overall package.

Housing is a particularly useful example.

An employee transferred from Paris to Silicon Valley might receive furnished corporate housing for the first several months of an assignment. On paper, that benefit increases the apparent value of the employee’s compensation.

In practice, its purpose may be very different.

The employee may still have financial obligations in France, may not know which Northern California community is appropriate for a longer-term home and may be entering a housing market dramatically different from the one left behind. Temporary housing gives the employee time to begin working without immediately signing a long lease or purchasing a home.

The benefit exists because the employee moved—not necessarily because the employee’s work is worth more than that of a colleague.

That is precisely the kind of distinction companies may increasingly need to articulate.

Home country or host country?

There is no universal answer to which group provides the correct comparison.

An employee’s compensation may remain anchored to a home-country salary structure under one assignment policy. Another organization may transfer the employee completely onto host-country compensation. A permanent international transfer raises different questions from a three-year expatriate assignment.

The European Commission’s explanation of EU pay-transparency rules emphasizes workers’ rights to information about pay and the criteria employers use to determine compensation.

For mobility programs operating across several jurisdictions, that means compensation, mobility, HR and legal teams may increasingly need to examine international packages together rather than independently.

Transparency may improve mobility programs

It would be easy to view greater pay transparency solely as another compliance challenge.

It could also expose opportunities to improve mobility programs.

International assignment policies often accumulate over years. One assignee may receive a legacy expatriate package negotiated under an older policy. Another may receive a newer “local-plus” arrangement. A third may have negotiated individual benefits because the business urgently needed that person’s expertise.

Those differences may all have explanations. But are they still defensible?

Greater transparency gives companies an incentive to find out.

Employers may need clearer distinctions between compensation for the job and assistance necessitated by the move. Housing support, relocation costs and temporary transportation can be explained differently from salary, performance bonuses or equity because they address circumstances created by mobility itself.

Clarity can benefit employees as well.

An assignee who understands why housing assistance exists, how cost-of-living adjustments are determined and what happens to compensation when an assignment ends has a clearer picture of the value and structure of the package.

Likewise, local employees may better understand why an international colleague temporarily receives benefits connected specifically to relocation.

A new question for global mobility

Pay transparency does not mean international assignees and locally hired employees must suddenly receive identical compensation packages.

International mobility inherently creates differences.

The bigger change is that employers may increasingly need to understand, document and explain those differences—particularly when an employee crosses between jurisdictions with their own approaches to pay equity and transparency.

For years, one of the central compensation questions surrounding an international assignment was:

What will it take to make this employee’s move financially workable? That question isn’t disappearing. But global mobility teams may increasingly have to answer another one alongside it: Compared with whom—and can we explain why?