I too had this issue today on a CentOS 7 server. I couldn't understand why my usermod commands seemed to be successful, but not persistent after rebooting the instance on GCE.
I got this fix from Google, not sure why it's not documented better:
The user and groups are partially managed by "google-accounts-daemon.service", which is part the guest images packages for linux. To make an user from the project have a persistent group, you have to follow these steps.
In the following example the group 'club' is going to be amended to this file.
1- Add the users the to /etc/default/instance_configs.cfg on each instance, there is an option "group". For instance:
“groups = adm,dip,lxd,plugdev,video,club”
2- Restart the daemon after changing this file:
“sudo systemctl restart google-accounts-daemon.service”
3- Check the status of the daemon and it should show some output for the new group assigned to all users:
“sudo systemctl status google-accounts-daemon.service”
“Jul 18 07:03:37 instance-2 usermod[1523]: add 'jaw' to group 'club'
Jul 18 07:03:37 instance-2 usermod[1523]: add 'jaw' to shadow group 'club'
Jul 18 07:03:37 instance-2 usermod[1528]: add 'root' to group 'club'
Jul 18 07:03:37 instance-2 usermod[1528]: add 'root' to shadow group 'club'
Jul 18 07:03:37 instance-2 usermod[1533]: add 'lucmult' to group 'club'
Jul 18 07:03:37 instance-2 usermod[1533]: add 'lucmult' to shadow group 'club' “