Most of the unit cell models for Z-pinned composite laminates (ZCL) are mesoscopic in scale, where the fiber reinforced zone is modeled as homogeneous but without detailed characterization and failure analysis of the fibers and matrix. This paper proposes a new concurrent multiscale unit cell model to investigate the in-plane micro-damage evolution of ZCL. The novelty worth mentioning is the proposed element-based method to generate random microbuckling spatial fibers in the fiber reinforced zone, where the microbuckling is caused by fiber waviness and fiber crimp, and then the mesh of fiber, Z-pin, matrix, and the interface between Z-pin and matrix is regenerated. In-plane tensile tests (ASTM D3039) are conducted for verification. There is good agreement between experiment and simulation, only with deviations of −0.97% and 2.69% for tensile modulus and fracture initiation stress, respectively. The research indicates that in-plane micro-damage initiates from the interface between Z-pin and matrix. The stress concentration and higher local fiber volume fraction, caused by the microbuckling spatial fibers clustered near the Z-pin, play a major role in the evolution of interface damage, crack initiation and growth.