Go grab the iOS 14.5 update in Settings > General > Software Update if you have an Apple Watch… and welcome to our mask-wearing longterm future!
iOS 14.5 will let Apple Watch owners unlock their iPhone while wearing a mask: Another oft-requested feature, especially with the ongoing COVID-19 pandemic. Apple doesn’t support Touch ID in it is newest iPhones, which can make unlocking with Face ID while wearing a mask a pain. But Apple is helping with that. Apple Watch owners will be able to confirm unlocking their iPhones while wearing a mask with iOS 14.5.
Source: Apple releases iOS 14.5, iPadOS 14.5, and watchOS 7.4 with Apple Watch iPhone unlock and more