you were missing a dash (-), see below:

# site.yml file
- hosts: ansible_slaves
  user: ansible
  sudo: yes

  #Define user and password variables
  vars:
    # created with:
    password : dummyuser
    user : dummypassword

  # Define task to add user
  tasks:
    - name: add user
      action: user name={{ user }} password={{ password }}
update_password=always
                   shell=/bin/bash home=/home/{{ user }}
      tags:
        - user


-- 
Brian Coca

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