Ensure you have completed the Phone Setup process on the watch app. If you have already done this successfully, turn your Bluetooth on and off to reestablish the connection.
Android users: Go to main watch Settings > Connectivity > Bluetooth, and check if 'Play phone voice call on watch' is turned on.
Users of both iPhone and Android can also check settings in the watch with the “Phone” app under Answer Preferences. Make sure "Accept on watch, answer on watch” is selected.