* Also adding over 300 staff for small business loans

* Boosts small business lending by $4 billion

* Unclear if CEO Dimon will get bonus; did not last year

* To pay $500 award to employees earning under $60,000

* Reinstates 401(k) match for 2009 (Adds background on regulation, Dimon's pay, lending efforts)

By Elinor Comlay

NEW YORK, Nov 9 (Reuters) - JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) is lifting a salary freeze it put in place last year, according to an internal memo, a sign of its growing confidence in the economic recovery after it reported several quarters of improving investment-banking profits.

Separately, the bank said it is adding more than 300 staff to its branches to support a $4 billion increase in small business lending. The initiative, like its mortgage modification program for homeowners, is an effort to show it is extending lending and helping to revive the U.S. economy.

As year-end bonus season approaches, bankers' compensation looms as a hot-button issue again. When the financial crisis was deepening, the industry came under fire from lawmakers for paying large bonuses to its executives even as it was being propped up with taxpayer money and cutting loans to a trickle.