The Federal government mandates that all states allow 501(c)3 nonprofit organizations and governmental entities to opt out of paying the SUI tax and reimburse directly. The following explains in further detail:

The Method the States are required to use in Coverage
“.06 Nonprofit organizations.–IRC Sec. 3304(a)(6)(B) provides, as a condition for approval of state laws (see .05 above), that the states must permit the nonprofit organizations required to be covered under IRC Sec. 3309 to contribute state unemployment taxes under a special method. Under IRC Sec. 3309(a)(2) the states are required to provide nonprofit organizations, or groups of such organizations, with the option of reimbursing the state for unemployment compensation payments attributable to service with the organization(s) in lieu of paying contributions under the normal tax provisions of the state law. This includes nonprofit elementary and secondary schools from 1978. In effect, the nonprofit organizations are allowed to adopt a form of self-insurance. Under the reimbursement method of financing, a nonprofit organization whose workers experience no compensated unemployment in a year will have no unemployment insurance costs for that year.”

Source: IC Unemployment Insurance Reporter (CCH) ¦20,271