You must file the H-1b extension/renewal immediately (had better using Premium Processing). Because you have been out of status, you have to stop working. If your H-1 extension is approved with I-94, you are safe and can contiune to work. But most likely, your H-1 extension will be approved without I-94, so you need to go outside U.S. to get an H-1 visa to activate your H-1 status if in that case and then, everything will be OK to you.
Good luck!
Good luck!