Former Michigan congressman Charles C. Diggs Jr., who remains on federal parole following his conviction for payroll kickbacks, is seeking an apprentice funeral director's license in Maryland with the intention of opening a funeral home in Prince George's County.

Diggs, who recently moved to Fort Washington, near Oxon Hill, resigned from Congress in August 1980, after being sentenced on 29 counts of mail fraud and making false statements. He currently serves as a freelance consultant for the Congressional Black Caucus.

The Maryland funeral board has delayed action on Diggs' month-old application. This is because of questions about whether his criminal record violates state requirements that applicants have "good moral character," explained George Gonce, board secretary.

"Conviction of a felony is grounds for refusal," said Gonce, "but the board can choose to go either way . . . We have to determine whether he in fact represents a threat to the consumers he will serve."

The board this week received copies of Diggs' court records and will consider his case Nov. 25, said Jack Tranter, an attorney for the Maryland Department of Health and Mental Hygiene. Diggs was a licensed funeral director and embalmer in Michigan and worked for his father's funeral home, House of Diggs, before and during his 12 terms in Congress.

Diggs appeared before the board last month to argue his case. "Obviously, there's no connection between that particular record his conviction and my practice of the profession," he said yesterday. Rejecting his request "would constitute a classical case of double, triple jeopardy," he added.

Because Maryland and Michigan do not automatically accept each other's licenses, Diggs must serve a year's apprenticeship under his sponsor, Doretha Hector, a funeral director and embalmer at the Elizabeth Phillips Funeral Home in Baltimore, before he can be licensed to operate his own business.

Hector said the former congressman has been working at the home since summer "answering phones and driving." Diggs chose the Baltimore funeral home because of his acquaintance with the firm's founder, the late Arlington S. Phillips, she said.

Diggs said he will continue working for the Congressional Black Caucus, a job he took following his 10 months at a federal prison camp in Montgomery, Ala. His parole expires July 23, 1983, said U.S. parole agent William Halprin.

"There's no mortuary in all of Prince George's that's owned and operated by blacks," he said. "I saw a need."

However, Gonce said Diggs has been told that the Adams Funeral Home of Aquasco, in the extreme southern portion of the county, is black owned.