Well, it's wrong no matter what. The employer should be asked to rescind the 1099.
If the employer has an accountable plan, and only reimburses for mileage at the IRS official rate or less, and only reimburses mileage that is proven to be work-related with a logbook, diary, journal, expense account form, or other method, then the reimbursement is not taxable and should not be reported on any tax form.
If the employer pays a mileage allowance without asking for proof, that is considered a non-accountable plan, and the money is taxable. However, the employer is supposed to include on on the employee's W-2 and make it subject to withholding of federal, state, social security and medicare tax.
Ask the employer to rescind the 1099, and issue a corrected W-2 if necessary. If they refuse, there are some options for what to do next, depending on what kind of proof your have related to work mileage. Post back here with further questions if needed.
