The former England athlete Andrew Medley and his brother Neil, who run an asbestos-removal company, were appearing at Leeds Crown Court. The hearing was told the brothers employed the boys, one aged 14, two aged 15, to remove asbestos from a factory near Leeds in 1996.
Exposure to even tiny quantities of asbestos can cause potentially fatal disease but the incubation period can be many years.
The court was told that Neil Medley, 37, from Menston, West Yorkshire, was the "dominant" partner in their asbestos removal company. He pleaded guilty to five of 11 charges.
Neil and Andrew Medley, 36, from Rawdon, Leeds, admitted working on asbestos without a licence at the turbine factory and employing the three boys in contravention of the Women, Young Persons and Children Act. The brothers admitted other offences involving removal and disposal of asbestos.
The brothers were both directors of Medleys Ltd, based at Guiseley, near Leeds, which was put into liquidation in 1996.
Judge John Cockroft told the pair they would not go to prison, but only because the law's maximum sentence did not permit it. But he said: "Only time will tell in relation to cases of this sort, whether disease caused by exposure to asbestos will cause Parliament to look again at the maximum sentences for these offences."
The case was adjourned until Friday when the brothers will be sentenced. The judge ordered other charges the brothers faced and charges against their firm should lie on file. He also imposed an order banning identification of the schoolboys.