Councillor Mohammed Yaseen Hussain, who is known as Billa, became the third Sandwell councillor to be suspended by Sir Keir Starmer's party in September.
It is not yet clear why Councillor Hussain has been suspended. He declined to comment.
A Labour Party spokesman said: "The Labour Party takes all complaints extremely seriously and they are fully investigated in line with our rules and procedures, and any appropriate disciplinary action is taken."
Councillor Hussain has represented Tipton Green since May 2018, and sits on the Audit and Risk Assurance Committee and Safer Neighbourhoods and Active Communities Scrutiny Board.
He also chaired a taskforce looking at the impact of Covid-19 on BAME communities set up by Birmingham MP Liam Byrne, Labour's candidate for West Midlands Mayor.
The Labour Party also launched an investigation into the borough's interim council leader, Councillor Maria Crompton.
Meanwhile Labour Party member and a Sandwell businessman Basharat Khan has also been suspended over social media posts.
His suspension is believed to have followed a series of posts he made which the party says "may reasonably be seen to involve anti-Semitic actions, stereotypes and sentiments".
One post from August 2014 shows a cartoon image featuring a man with a Star of David symbol on his sleeve chopping up a small child. Mr Khan wrote: "Until the Kings of KSA [Kingdom of Saudi Arabia] are overthrown Israel will continue its killing and destruction of the people of Palestine."
Mr Khan told the Express & Star he was trying to highlight to political turmoil in the Middle East, in particular "Israel's bombing of Palestine".
He said: "I'm not anti-Semitic. I have never been anti-Semitic.
"I have friends in the Jewish community, the Sikh community, the Hindu community, every community.
"I am sorry if I got it wrong. It was not my intention to hurt anybody."
Mr Khan is the complainant in the case against Councillor Hadley, where he alleged she made racist remarks during a private phone call. Ms Hadley has denied any wrongdoing and claims the tape featuring the comments was doctored.
Mr Khan added: "My complaint against Joanne Hadley's racist remarks – this is revenge for that."
Councillor Yvonne Davies stood down as council leader in July after she was suspended by Labour over allegedly anti-Semitic posts.