H1-B approved with I-797b but SEVIS got inactive

Hi,

I got my H1-B approved on Nov 7th and I received I-797b approval notice (which means the change of status not approved since I am already working in the USA), but when I contacted my DSO they told me that my SEVIS status is made inactive since the change of status was approved. How can that be possible? Is this a mistake made by USCIS? Am I not legal to stay here now? Can someone please help me understand my situation here and what should be my next move?

Your physical copy of approval notice will tell you that, if it was approved with COS or without COS. Depending on that you either work with USCIS or SEVIS as needed. I suggest you speak to your attorney and then take action based on your situation.