Under Meyer's new policy new moms can take up to 16 weeks of paid leave with benefits after having a child. This is double what they were allowed before, NBC reported Tuesday.
New dads also get increased benefits as they can request up to 8 weeks of paid leave with benefits to take care of their newborns.
In addition, Yahoo will give new parents a one-time bonus of $500 to spend on supplies as well as several Yahoo branded baby gifts.
Meyers's new administrative action puts Yahoo up to par with business giants like Facebook and Google. Many analysts claim this is a smart, long-term move that will attract and retain more talent.
"It's a smart move," said Rachel Sklar, a New York-based blogger and founder of The Li.st, an organization dedicated to elevate the status of women in New Media and technology. "It suggests a long-term strategy. This is a great precedent."
The 37-year-old mother is the youngest CEO of a Fortune 500 company. She was appointed Yahoo's Chief Executive Officer in July, 2012.