you have to have a passcode. You just have to swipe to the left and enter it if your finger won't work. I actually discovered that it doesn't work when dirty... I was showing my phone to all my friends during lunch and everybody wanted to test the finger sensor so I let them but when I went to put me finger in it wouldn't let me on but then I cleaned the button and it worked... After I had already started freaking out that I had broken it! I hadn't doscovered this earlier because I've been cleaning my phone daily but I hadn't cleaned it yet!
I can't lie, that 5S really makes me want to switch to an iPhone. Great looking phone, and internals too