A jury of eight women and four men was selected yesterday to hear testimony in the case of Rep. Charles C. Diggs Jr. (D-Mich.), who is charged with padding his House office payroll and diverting government funds to his personal use.

The day-long process of selecting the jury, along with five women and one man who will serve as alternate jurors, was concluded late yesterday afternoon.

U.S. District Judge Oliver Gasch immediately ordered the jurors and alternates to be taken to a nearby hotel where they were to stay every night until the trial is concluded. The trial is expected to last two weeks.

Diggs was charged last March in a 35-count indictment with diverting to his personal use of more than $101,000 in payroll funds pruportedly paid to employes on his office and committee staffs. Diggs, 56, is the senior black member of Congress. He is the first black to be elected to Congress from Michigan and is completing his 12th term in Congress. He is the senior Democrat in the Michigan delegation.

Diggs' lawyer, David Povich, asked Gasch yesterday to postpone the trial one month following an article published in the The Washington Star Monday that Povich said contained an incorrect statement of the charges against Diggs. Povich argued that the article, and repetition of its contents on radio news broadcasts yesterday morning, "tainted" the prospective jury panel. Gasch denied the motion.

The trial is expected to begin today with the government prosecutor's opening argument and initial witnesses. Gasch has indicated that since the jury has been sequestered to avoid exposure to possibly prejudicial publicity, he would hold court on Saturday in order to expedite the trial.

According to the indictment returned against Diggs, three persons on his congressional staff kicked back between $15,000 and $25,000 in annual salaries between 1973 and 1977. In addition, Diggs is charged with paying three persons in Detroit with congressional funds for noncongressional work. Those three persons allegedly were paid for work performed either for the Diggs family or for the House of Diggs Inc., the funeral home formerly owned by Diggs.

Diggs, who resisted efforts to remove him from chairmanships of the House District Committee and the House Foreign Affairs Subcommittee on Africa, was renominated in the August Democratic primary in Michigan and is running for a 13th term.